Retirement Annuity
A retirement annuity is what you get once you exchange your pension pot at retirement. It is basically a contract to provide you with an income for the rest of your life.
There are a number of different types of retirement annuities and here are some of them:
- Lifetime annuity
- Guaranteed annuity
- Investment annuity
- Enhanced annuity
- Smoker annuity
- With-Profits annuity
- Impaired life annuity
- Protected Rights annuity
When you purchase an annuity with your own funds there are two other types of annuity available:
- Purchased life annuity
- Immediate needs annuity (for long term care)
Whenever you consider buying an annuity you should always seek independent financial advice from an annuity specialist. They will take you through all the options that are available within an annuity. We have compiled a list of the annuity options here:
- Frequency of retirement annuity income
- Income paid in advance or in arrears
- Increase in Payment (Escalation)
- Partner’s Pension
- Tax Free Cash
- Guarantee periods
Once you have decided which of these options you need for your own benefit then you can see how much these will reduce your starting pension. The best annuity rates generally are on a single life level basis with no options.
