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You can buy an annuity with the money that is left in your pension after you have taken the tax free cash sum. The insurer promises to pay a guaranteed taxable income for life.
The level of income (your pension) depends on the annuity rate at the time. Annuity rates vary from company to company. They are based on mortality rates (how long an average person lives), interest-rates and the insurance companies expenses (paying their staff, commission and so on). There are number of options, such as providing your spouse with a pension should you die first, available to you which we will explain in more detail once you contact us.
The day you retire you would normally be entitled to a tax free cash lump sum payable to you straight away. You can either spend the money, or invest it, or a combination of both.
Enhanced annuities may be available to you if you are in poor health at the time you retire - please contact us for more details.
Profit and unit linked annuities are also available. They introduce an element of investment risk into your retirement and are therefore not suitable for everyone. If you would like to know more please contact us.
The advantage of annuities is that the income you will receive is guaranteed. The disadvantages are that you lose control of the capital and that if your circumstances change, you cannot change your annuity.
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