The purpose of purchasing an annuity is to safeguard the money you have saved into your pension and provide an income in retirement. There are a host of annuities on offer from fixed lifetime annuities to investment based options. Although investments are potentially more lucrative, they also carry a far higher level of risk. This form of annuity could increase or decrease in value. A fixed annuity has no such issues, though they are restrictive. Once you purchase an annuity you are tied in… so make sure you make the right annuity purchase.
You will probably have been offered the option to purchase your annuity from your pension provider. Statistics show that it is wise to shop around on the open market as it may be possible to get up to 40% more income than just taking the first annuity offered.
Annuities can be complex. This could be the most important investment you ever make. That is why it is critical to speak to an independent financial advisor who can help you make the best choice when purchasing your annuity.