Annuity

An annuity is a product which provides an income for life. In fact, it guarantees an income for life. When you buy an annuity you are essentially paying for a sum of cash to be paid to you at regular intervals after you retire and until you die.

To buy an annuity you need to have been paying money into a pension fund whilst you have been earning an income during your working years. Upon reaching retirement you will have built up a pension pot and this can be used to buy an annuity.

You can buy your annuity from the company which provided your pension. Or you can go elsewhere, to another provider, where you might find better rates.

How your annuity is paid depends on your circumstances. If you would like your partner to benefit from your annuity after you die you can buy a joint-life annuity, if you want to be the sole beneficiary - you can buy a single-life annuity. You can also buy annuities which pay more as you get older, or which pay set amounts at different stages in your retired life.

	Nationwide unveils new annuity service Nationwide is going head to head with the UK's high street banks by launching a new annuity service, offering plans from six major providers.
	What will happen to annuity rates in 2012? If you are planning to retire in 2012 then scoring the annuities market and selecting an annuity using the open market option is vital, says Kate Saines.
	LV= boosts investment linked annuity rates Retirement specialist LV= has announced increases of up to 20 per cent on its investment linked Pension Income Plus Annuity rates.
	MGM: Annuity rates have plunged 11.2% since June 2009 Annuity rates have dropped by more than 11 per cent in less than three years, putting pressure on people approaching retirement, according to MGM Advantage.
	‘Opaque’ annuity system costing pensioners £1bn a year Half a million people retiring each year lose out on up to £1 billion from future pension income because of the way annuities are sold, a new report suggests.