Should you buy an annuity, or choose income drawdown?

Annuities
Buying an annuity means using your pension fund to provide an income which you receive for the rest of your life.

You arrange an annuity through an insurance company. Annuities are flexible. For example you can opt to receive the same amount each year, or build in annual increases. You can arrange so that your spouse or partner receives some or all of the annuity if you die.

If the company that’s arranging your annuity sends you forms to fill in, we’d advise you to get in touch with an independent financial adviser, like us, before you sign the forms.

If you ask us, we’ll help you review your options and choose what’s most appropriate to your circumstances.

Income drawdown
This is also known as income withdrawal. It allows you to put off buying an annuity. Instead, you take an income, which is taxable, from your pension fund. The fund remains invested.

We can help you decide if this is would be an appropriate option for you, and what you need to do next.