Lifetime Annuity
Annuities are simply a means by which you can convert your existing pension fund to an income that will be paid for the rest of your life. Unlike a 'Pension Drawdown' which is classed as an Unsecured Pension (USP), 'Pension Annuities' are classed as 'Secured Pensions' because the income amount can be guaranteed for life. A Pension Annuity can be purchased using the whole of your pension fund or, if you prefer, it can be purchased using the remaining fund after you have taken your tax-free cash entitlement (usually around 25%). The amount that you are entitled to receive from the Annuity will depend on the 'Pension Annuity' rate that is available at the time of purchase.