Variable annuities have now become a substantial part of retirement and investment plans. Before you buy a variable annuity, you should know some of the basic facts about them. Be prepared to ask your independent financial adviser a lot of questions about your Annuity Options.

A variable Annuity is a contract which invests in either with-profits or unit-linked funds, and your future income may rise or fall depending upon investment returns achieved. A With Profits Annuity has a guaranteed minimum income, whereas a Unit Linked Annuity does not. Due to lack of demand, very few providers now offer unit linked annuities, however with profits annuities are increasing in popularity.

More recently, the term Variable Annuity has been used to describe what is essentially an income drawdown product with a guarantee to underpin the income.  These products originated in the United States, and, although very suitable for certain circumstances, they have not proved to be especially popular in the UK, and indeed one major provider withdrew from the UK market in 2009.

Before buying any variable annuity you should find out as much as you can about the particular one that you are considering. Ask for full details from the insurance company or from your independent financial adviser, and read them very carefully.

Call  0845 123 5590  or  01325 487192