Annuities
An annuity is a contract (usually with a life insurance company) that guarantees a series of payments in exchange for a lump sum investment.
An easy way to get a handle on annuities is to think of them as the mirror image of mortgages. Although we talk about 'purchasing' an annuity, you are actually lending your money to the issuer. The issuer then invests those funds and contracts to repay you, with interest, in predetermined installments over a set period of time. This may be for an agreed upon number of years, as in term-certain-to-age-90 annuities, or for life.
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