Skip to content

Annuity jargon buster

When shopping around for an annuity, you'll likely come across technical terms. Use our jargon buster to find out what they mean.

  • Guarantee period - you can guarantee your annuity so it pays out for a specific number of years. If you die before then, the income will be paid to your partner or another dependant.
  • Impaired or enhanced annuity - these pay out a higher income if your health or lifestyle may shorten your lifespan, for example, if you have an existing health condition or you smoke or are overweight.
  • Lifetime annuity - these will pay you an income for the rest of your life, unlike a short-term or fixed-term annuity (see below).
  • Short-term or fixed-term annuity - you can use part of your pension pot to buy an annuity that provides a short-term income. The rest of your pot is left invested, and you can choose to buy a lifetime annuity when your short-term one expires. You might choose a short-term annuity if you don’t want to commit your pension fund to a life annuity as you believe rates might get better in the future.

Find out more about annuities, including the different types available, on the Money Advice Service website.

Further information

For more information: Call Age UK Advice: 0800 678 1174

This page was last updated:

Was this helpful?