What is an Annuity?
- Getting a pension annuity policy is comparable to securing income for your retirement.
- Annuity is an insurance contract that secures against you living long enough and your retirement fund potentially drying up.
- You buy an annuity with a lump sum--usually your pension pot. The annuity will then give you income for the rest of your life in monthly or yearly installments.
- How much you will get each year is based on the annuity provider or financial adviser's assessment on your risk factors, based on things such as your age, health, and lifestyle.
- This is absolutely fine, provided your adviser has done their job correctly in making sure that it was not mis-sold and you were offered and signed up for a suitable annuity.