Annuity

An annuity is a type of insurance.  The insurance policy will offer regular income in exchange for a lump sum amount when the policy is taken out.  For example if you retire then you will most likely have a fixed income, unless you have a retirement account outside of a pension.  The fixed income is not always the most affordable for living in your older age.  The pension policies certainly help you, but an annuity can offer even more income to help.
With a pension you can take up to 25 percent as a tax free lump sum.  The rest will then be converted in to a different type of annuity.  Basically annuities work as a life insurance policy in reverse.  You have the lump sum in the account and it is divided up through your next living years. So it pays you rather than having an insurance policy that you pay for and will payout at death.
An annuity must be created from a pension by the time a person is 75.  By this time 25 percent of the pension will most likely be used if not more than that. There are some exceptions to how pensions work and the need for an annuity.
You don’t have to just have a pension turned into an annuity.  You can also purchase other annuities to make your life a little easier in the last few years.  The rates on annuities have changed though.  They used to have an 8 percent return, but this has since dropped.
So for example if you have 100,000 pounds in your account the annual income from the annuity would have been 8,000 pounds.  With the reduced rate you can be looking at less per year to live off of.  If you have a mortgage or any other expenses like high medical bills this can be costly to you and mean that you lose a lot of what you have worked for. 
It is important that you understand how annuities work and get the best type for you and your family.  Everyone that is of a certain age and has a pension can get an annuity.  Before launching into an annuity you need to compare the different options through banks and other annuity lenders.  This will allow you to get the best rate.
By going online you can research annuities for the needs that you have.  With annuities you have a lot of work in research to make sure that you are getting all that you need.  You don’t want to have to rely on a retirement job as well as your children to help you through life.  Certainly they are glad to do it, but your other retirement investments should help you even if the annuity is lower than you wish for. 
Just keep in mind that with annuities your pension will need to be rolled over if it comes from employment or other pension schemes like stakeholder pensions.  Only you can say what your money will do for you.