UK annuity rates and annuities

An annuity is the payment of a regular income by a life company to an annuitant in exchange for a lump sum either for life or shorter periods.

Annuities are typically used for retirement pensions and the individual receiving the annuity is known as an annuitant. Annuities can broadly be classified into two types: (A) Compulsory purchase annuity which is bought from the proceeds of a pension fund and is taxable as earned income (B) A purchased life annuity which is bought with an individual's own capital and is taxed at a lower rate than a compulsory purchase annuity.

Why should you get advice before purchasing a UK Annuity? 

Are you absolutely sure that you know which annuity is the right one for you?

You do NOT have to purchase your annuity from your pension provider - you simply need to know the answers to the following two questions :-

1. What "type" of annuity do I require?
2. Who is currently giving the best annuity "rate"

You should ALWAYS take Independent Financial Advice before purchasing an Annuity of any kind as you only get the one chance to get it right.