We have set out an explanation of some common terms relating to Annuities and Pensions. They are provided for information and educational purposes only and are not to be construed as advice in any circumstances. We would always strongly recommend always taking Independent Financial Advice on matters relating to pensions and annuities.
An Annuity is a contract contingent upon the duration of human life whereby a payment of a regular income by an annuity provider (usually an insurance company) is made to an annuitant in exchange for a the payment of (usually) a single premium/lump sum.
Annuities are typically used for pensions and the individual receiving the annuity is known as an annuitant. In the UK annuities can broadly be classified into two types:
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