The amount of income an annuity will pay will depend upon a number of things. These include your age, your health and the amount in your pension fund after taking any tax-free cash.

Lifetime annuities and scheme pensions are both types of secure pension, providing individuals with a known amount of regular income, usually for their lifetime.

While there is usually no flexibility to vary the levels of income, market risk and investment decisions are removed.

This contrasts with flexible access pensions where individuals leave their pension invested and take on all of the investment risk but can choose how much of their money to withdraw and when to take it.

Lifetime Annuities don’t have to be purchased from the same company that runs the pension scheme. Individuals may be able to secure a better annuity rate from another company, known as an ‘open market option’.

Lifetime annuities can be used to provide pensions for the original member and/or their survivors. They can also be bought with either ‘uncrystallised funds’ or drawdown funds.

Some individuals may be able to buy an impaired life annuity or an enhanced annuity which will give a higher starting pension due to a lower life expectancy. These are available to individuals with particular medical conditions (such as heart disease or cancer) or lifestyles (for example, smokers).

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.