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Advantages and Disadvantages of Annuities

Advantages
N
It pays you an income which cannot go down in value (only conventional/enhanced/impaired annuities)
N
Income is paid until you die – not for a limited period
N
Income will never run out in your lifetime.
N
There’s no investment risk for conventional annuities
N
It can provide an income after your death to other family members
N
You can protect your income against inflation
N
Easy to understand the choices
N
Option to protect capital through Pension Annuity Protection
Disadvantages
M
Once an annuity is set up you cannot change it
M
If it is set up on your life only, on your death it will stop
M
You must decide what income type you require at the outset
M
You must decide what additional benefits you are going to include at outset
M
You lose ownership of your funds
M
Potential loss of benefit and capital on death
M
No further benefit from investment growth
M
Annuity rates fluctuate therefore if you buy when the rate is low your income is fixed at this rate