Types of Annuity

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Types of Annuity

An annuity guarantees an income for life so for many people, even following the significant changes to pensions legislation which has given greater freedom and more options open to those about to retire, this will probably still be the best option available.

With many pensions however, their annuity does not have to come from the provider of the scheme that their pension contributions have been paid into. The first thing to consider is whether to exercise the open market option. If another provider offers better annuity rates, thereby providing a higher pension, the fund can be transferred and the pension then starts immediately with the new company. Scouting around the market for good deals may affect income levels by as much as 30% to 40%.

Please click on the type of annuity below for more information:

• Joint Life Annuity
• Level or Increasing Annuity
• Enhanced Annuity and Impaired Annuity

How do I find out more about annuities?

Please click here to read the Pensions.co.uk guide to pension annuities. Because some of the terms relating to this product are confusing, please also visit our glossary of terms for a full explanation of the jargon.