What is an Annuity
An annuity is an insurance policy that guarantees to pay you a regular income for the rest of your life. It is purchased with your pension fund after you take any Pension Commencement Lump Sum (tax free cash). But once bought, annuities cannot be switched to another annuity provider, cannot be changed to a different type of annuity and cannot be altered in any way for the rest of the annuitant's life. Once the capital from the pension fund has been spent on an annuity, there is no opportunity for any of this capital to go to a beneficiary on the death of the annuitant.
The Open Market Option
You can choose who you purchase your annuity from. Therefore if the type of retirement income you require is not offered by your current provider, or you simply prefer to be with another provider, you can obtain your annuity from them, usually with no penalty. You may find that another provider could also offer you a higher level of income. This is called 'using the open market option'. The open market option is not available for every plan or scheme, please check with your financial adviser for more information.
Enhanced Annuities
If you or your partner is suffering from a serious medical condition, your retirement may not last as long as someone who is in good health. This means we will pay an enhanced (higher) income than a standard annuity, because of your medical history or current medical condition. Depending on the severity of your condition, it may be a significantly higher amount.
Finding an Adviser
We think it's important for you to seek expert financial advice before making any big decisions about what to do with your hard-earned cash. Click here to find an independent financial adviser.
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