An annuity pension is a way of withdrawing your pension savings in your retirement. It is a financial product that you purchase from an insurance company using your pension pot or part of it.
An annuity provides you with a guaranteed retirement income for a fixed number of years (fixed-term annuity) or for a lifetime (lifetime annuity), depending on the pension terms. An enhanced annuity can provide you with a higher income if you've been diagnosed with an illness or have reduced life expectancy.
It is common for people to withdraw a tax-free lump sum of 25% from their pension fund and with the rest 75% purchase an annuity.
Read more on pension withdrawal here.
