An annuity is provided by an insurance company and pays you an income for the rest of your life.
For many people, an annuity provides their pension income when they retire so it is important to make sure the features provided reflect your needs in retirement.
There are many more choices available at retirement than there used to be. Not all annuity providers offer the same benefits and the difference between the highest and lowest annuity rates on the market can be significant, which will affect the income you receive. Lifestyle choices such as smoking or drinking and medical conditions can have a significant impact on increasing your retirement income. Additionally, the Chancellor used the 2014 budget to announce sweeping reforms that may mean an annuity is no longer an appropriate way to provide your retirement income.
If you do require the secure income that an annuity can provide in retirement it is always best to shop around for your annuity rather than automatically taking an annuity from the pension provider you have saved with. Pension savers can benefit from using their 'Open Market Option' or 'OMO' so they are free to select an annuity from the best provider.