What is an Annuity

What is an Annuity?

An annuity is a regular income paid in exchange for a lump sum, usually the result of years of investing in an approved, tax-efficient pension scheme. There is no longer a legal maximum age by which you must take an annuity (previously subject to an age limit of 75).

There are a number of different annuity options, but broadly speaking there are two types to choose from:

On retirement up to 25 per cent of your pension fund can normally be taken as a tax-free lump sum. The remainder of your pension fund can then be converted into an annuity. There may also be alternatives to buying an annuity that are available to you.

For more information on annuities and to see if you qualify for an enhancement on your annuity please speak to the independent annuity advice team from one our partner firms for a free initial no obligation consultation.

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