Glossary

A type of investment where you pay a lump sum at the start, and receive regular payments (say monthly) for the rest of your life. Some annuities will continue for a minimum period, normally 10 years. You can also take out an annuity that is dependent on both your life and that of your partner's. Often the level of payment would reduce on the death of the first person. Normally the annuity payment is for a constant amount. It is possible to get an increasing amount to cover inflation, but it will cost more to purchase.