What is an annuity?
An annuity is essentially a financial services product that allows you to convert your retirement savings into a guaranteed income for life.
How much income you receive depends on a number of things:
- The amount of retirement savings you have.
- Your age when you come to buy your annuity.
- Whether you choose to take any tax-free cash.
- The annuity features you choose to 'add on' – such as protecting your income for your partner should you die before them.
- Other factors such as your health and lifestyle.
- The economic circumstances at the time – generally speaking, when interest rates are lower, you'll get a lower income and when they’re higher, you'll get more.