 The
Annuity Maze
There are so many annuities to
choose from with many different options. Hopefully, the
following 'decision tree', produced by the Financial Services Authority,
will guide you closer to the annuity that suits you best. |
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Do you have a wife, husband,
or other partner? |
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Whatever other annuity options
you choose, You should consider a joint life last survivor annuity. Follow
the arrows to check the other options. |
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Will this annuity be a major
source of you retirement income? |
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You could consider a level annuity
but be aware that, because of inflation, it will buy less and less as time
goes on. Follow the arrows to check the other options. |
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Do you have a pension fund of
more than £150,000 to buy this annuity? |
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Consider:
an escalating annuity
an RPI-linked annuity
a with-profits annuity
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Would you be comfortable with
an income that could fall as well as rise? |
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Consider:
a with profits annuity with 0% ABR
phased retirement
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consider:
a with-profits
annuity
with a higher ABR
a unit linked annuity
an unsecured pension
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Whichever annuity you choose,
if you are worried that your pension fund will be 'wasted' if you were to
die soon after retirement (when the annuity would not have paid out much),
consider opting for a guarantee period |
