Fixed-term annuities gain interest as UK workers bridge pension gap
Fixed-term annuities are attracting renewed interest in the UK as a way to provide guaranteed income between leaving work and receiving a state or workplace pension. They offer a middle course for people who are not ready to commit to a lifetime annuity or manage pension withdrawals through drawdown.
The products pay income for an agreed term, often five or 10 years, then return a specified lump sum. Standard Life says a 62-year-old with a £100,000 pot could receive about £13,800 a year for five years and £50,000 at the end. Demand has risen amid higher annuity rates and upcoming inheritance tax changes, though a survey found many people still misunderstand how annuities work.
- Fixed-term annuities can bridge the years before pension payments begin.
- A £100,000 pot could pay about £13,800 a year for five years.
- Interest is rising, but confusion about annuities remains widespread.
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Originally published by The Guardian as “UK sees growing demand for help bridging gap between end of work and start of pension”.