what is an annuity pension

An annuity pension is a financial product that provides a guaranteed income for a fixed period or for the rest of your life. It can be purchased with some or all of your pension pot and pays income either for life or for an agreed number of years. An annuity can be a suitable option for individuals who are risk-averse and want a guaranteed income for their retirement. There are different types of annuities to choose from, such as lifetime annuities, fixed-term annuities, enhanced annuities, investment-linked annuities, and purchased life annuities. Each type has its own features and benefits, and the best option depends on various factors such as other retirement income, health status, and risk tolerance. When you buy an annuity, the decision is irreversible, and you cannot change your mind later. An annuity pension can provide peace of mind and a stable source of income during retirement.