Advantages and Disadvantages of Annuities

Advantages

It pays you an income which cannot go down in value (only conventional/enhanced/impaired annuities)

Income is paid until you die – not for a limited period

Income will never run out in your lifetime.

There’s no investment risk for conventional annuities

It can provide an income after your death to other family members

You can protect your income against inflation

Easy to understand the choices

Option to protect capital through Pension Annuity Protection

Disadvantages

Once an annuity is set up you cannot change it

If it is set up on your life only, on your death it will stop

You must decide what income type you require at the outset

You must decide what additional benefits you are going to include at outset

You lose ownership of your funds

Potential loss of benefit and capital on death

No further benefit from investment growth

Annuity rates fluctuate therefore if you buy when the rate is low your income is fixed at this rate