Here are some aspects to choosing a fixed term annuity you might like to weigh up.
| Advantages |
Disadvantages |
| You have a guaranteed income (within government limits) and a guaranteed maturity lump sum at the end of the term. There is usually no investment performance risk to worry about |
You do not have the security of a guaranteed income for life
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You can reassess your income and benefit needs at the end of the term and reinvest your maturity lump sum accordingly
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The level of income you can buy in the future with your maturity lump sum will depend on annuity rates at that time and cannot be guaranteed. It could be higher or lower than the income you could get today
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You retain ultimate control over your pension fund and can build in death benefits to ensure that a lump sum is passed back to your beneficiaries should you die prematurely
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Once your plan has started, you cannot change the income or the benefits selected for the term of the plan. If you have not selected any death benefits and you die during the term, the income will stop and the maturity amount will be lost
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Some fixed term annuities can include an option to convert to an enhanced annuity, should your health deteriorate and providing you qualify, during the term
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Not all Providers offer a conversion option, and therefore if your health deteriorates during your term, you may have to wait until maturity before being able to convert to an enhanced annuity
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We would aways ask you to discuss your situation with a financial adviser.
If you don't have an adviser you could use Unbiased.co.uk to help you find one.
Useful links Annuity options
Just Retirement annuities