Securing an income in retirement

pensions

At-retirement annuities can be a good way of guaranteeing an income for life in exchange for a lump sum

When the Pensions Bill becomes active in April 2006, there will be no compulsion to buy an annuity at age 75 or over. Compulsory annuity purchase has caused dissatisfaction over the fact that an annuitant's capital returns to the insurance company when the annuitant dies. However this structure was fundamental to the security afforded by the guarantee of lifetime income at pre-determined levels. Annuities do a straightforward job very well. They provide a guaranteed income for life in exchange for a lump sum. They do this whether the financial climate is buoyant or faltering, and whether a...