Originally Posted by
IanD
Annuities are a minefield and worth reading up on. Typically you hand over £100k and you get an income of 3k ish. But, all sorts of factors come into play such as whether you smoke, whether you want a fixed income, income with an annual increase, joint income, fixed income period and so on. Plus you get taxed on that income so take off 20/40% as any pension/other income will be taken into account for tax purposes. If you can build up savings via ISAs etc then income drawdown might be a suitable option, taking out the sum equivalent to whatever the prevailing tax threshold is, not working and enjoying life until a company and/or state pension kick in (and downsize to avoid inheritance tax). A quick bit of Maths shows you have to live quite a while to benefit fully from an annuity, too.