For most people, it's the one that pays the most income, but we're also here to make sure you find one that can meet your personal circumstances. Remember, it's important to get it right, as you can't change things down the line.
It's also essential you understand the key differences between each annuity option - and don't just choose one with the highest starting income. Longer term, it might not actually be right for you.
We can take you through your options in more detail online, over the phone, or if you require advice you can do this with one of our Senior Financial Consultants. Here's a quick outline of some things to start thinking about.
This option is known as 'joint annuities'.
This means a percentage of your annuity is paid to your surviving spouse or civil partner after you die. Commonly this is 50%, 66.7% or 100% of the original amount you receive. If your spouse or civil partner won’t rely on your pension income after you die, a single life annuity could be more appropriate for you.
This option is known as 'increasing annuities'.
You can set your annuity to increase either by a fixed percentage each year, or in-line with changes in a Price Index. This is really about helping to make sure your income is protected against the effect of inflation - and the natural rise in living costs over the years.
Although an increasing annuity may give a lower monthly income to begin with, it will increase over the years.
Lifetime annuities keep paying you for the rest of your life, but what if a dependent or partner outlives you? How will they get by? As well as a joint annuity, you could choose a ‘payment guarantee’ or ‘value protection’ to provide for them. A payment guarantee option makes sure your annuity carries on paying out for a pre-agreed number of years. Value protection allows you to protect the pension pot used to buy your annuity until you have received payments exceeding it.
Most people choose to be paid monthly in advance. But you could instead choose quarterly, half-yearly or annually and also in arrears. It's really up to you.