Advantages and Disadvantages of Annuities
Advantages
It pays you an income which cannot go down in value (only conventional/enhanced/impaired annuities)
Income is paid until you die – not for a limited period
Income will never run out in your lifetime.
There’s no investment risk for conventional annuities
It can provide an income after your death to other family members
You can protect your income against inflation
Easy to understand the choices
Option to protect capital through Pension Annuity Protection
Disadvantages
Once an annuity is set up you cannot change it
If it is set up on your life only, on your death it will stop
You must decide what income type you require at the outset
You must decide what additional benefits you are going to include at outset
You lose ownership of your funds
Potential loss of benefit and capital on death
No further benefit from investment growth
Annuity rates fluctuate therefore if you buy when the rate is low your income is fixed at this rate