If you have a personal pension, you could use this money to purchase an annuity that gives you a guaranteed income for the rest of your life, providing you with unrivalled peace of mind. It may not be the best option for you, but a Moneysprite annuity adviser will support you to make the right decision.
What are annuities?
Annuities are a financial product that give the annuity holder an annual income for a fixed amount of time or even for the rest of their life. Each year, the individual will receive a fixed income to help with funding their retirement for the duration of the annuity. This money will be subject to income tax, if applicable.
What are the different types of annuities?
Annuities can be split into two main types:
- Lifetime annuities
- Fixed-term annuities
A lifetime annuity pays out for the remainder of your life. This means you will receive a guaranteed fixed income for the whole of your retirement, easing any existing money worries.
A fixed-term annuity provides an annual payment for a specified term of so many years. Once the fixed-term annuity ends, no more payments will be received, and the individual will need to live off their pension(s) alone.