ANNUITIES – A LOWER RISK CHOICE

An annuity is basically the swapping of a sum of money in exchange for a guaranteed income for life or for a specified term of years. The Government backs these guarantees in most cases. So if you have £50,000, for example, and do not need the capital but do need to increase your income, you can go out to the market and trade the capital for an income. Once the deal is done you are guaranteed to get your income, so there is no investment risk – in most cases. Annuities are normally only worth considering by those aged 55 and older