Annuities Explained

The following information will provide further details of the annuity options available to you.  Just click on the appropriate headings to view these details.

What is an annuity?
You have been paying into your pension for years and now wish to retire. The big question you are asking yourself is ‘What do I do?‘

Open Market Options
These are probably the three most important words in respect of your current pension policies.

Conventional Annuities
Annuity contracts are still the most appropriate contract for many individuals entering into retirement.  These are normally established on a level or an escalating basis.

Investment Based Annuities
Conventional annuities are currently perceived by some people, rightly or wrongly, as offering ‘poor value for money‘

Impaired Life or Enhanced Annuities
It is estimated that almost 40% of those now entering into retirement can enhance their annuity income further due to either existing or previous medical conditions or because they have a lifestyle condition, such as smoking.

Purchased Life Annuities
These are voluntary purchases bought out of capital.  Part of the income paid is regarded as a return of capital and is tax-free.

Optional Benefits?
Choosing the most appropriate annuity is difficult enough in itself but then there are the additional issues concerning the benefit options that also need to be considered.