Annuities come in different flavors, each with its own set of features. The most straightforward is the ‘lifetime annuity,’ which pays out until you pass away. Then there’s the ‘fixed-term annuity,’ offering income for a set period, say 10 or 20 years, and sometimes a lump sum at the end.

If you’re worried about inflation eating away at your income, an ‘inflation-linked annuity’ might be up your alley, as it increases your payout each year in line with inflation. For those with health issues, ‘enhanced annuities’ offer higher payments, recognising a potentially shorter lifespan. 

Deciding when to buy an annuity is a bit like trying to time the stock market – it’s tricky! Annuity rates are influenced by various factors, including interest rates and life expectancy.

When interest rates are low, annuity rates tend to be lower too. This means you might get less income for your pension pot. However, waiting for rates to rise can be a gamble. It’s important to consider your personal circumstances, like your health, other sources of income, and how much you need certainty in your retirement income. 

Predicting the future of annuity rates is a bit like reading a crystal ball – it’s uncertain. Annuity rates depend on several factors, including the general economic environment, interest rates, and life expectancy trends.

If interest rates go up, annuity rates might increase too, as insurers can get better returns on their investments. However, if people continue to live longer, this could put downward pressure on rates. It’s a complex mix!