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| Home > Annuities > What Options are Available? |
| The Options Available |
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It is important to remember that not all annuities are the same. While they all provide you with an income, there are a variety of options that you will have available to you. This will allow you to personalise your annuity to your individual needs.
Level Annuities
These are annuities that provide you with a fixed amount of income for the rest of your life. They generally provide a higher level of income to start with but have the disadvantage that inflation will generally reduce what you are able to buy with the income each year.
Escalating Annuities
These are designed to combat the effects of inflation on your income. They work by increasing your income every year. The cost for you is that your income will start from a lower amount than if you had a level annuity. There are different options, with set annual increases of 3% or 5% and also increases in line with the Retail Price Index (RPI).
Joint Life Annuities
Where it is important, an annuity may be set up to provide an income to a surviving partner, after the death of the annuitant (the person purchasing the annuity). This is commonly used to provide an income for the surviving spouse for the rest of their life. The cost of this would depend on the age and health of the partner but would result in a lower starting income. The income for the partner could be the same amount or a lower amount.
Guaranteed Annuities
One of the main concerns about annuities is that they may offer poor value for money if a person were to die soon after starting an annuity. A guaranteed annuity offers the option to ensure that the monthly payments are paid for a minimum period, regardless of how long the annuitant lives for. Companies usually offer guaranteed periods of 5 or 10 years but will result in a lower starting income. |
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