Finance
What is An annuity?
An annuity is a financial product that pays you a steady stream of income, often for life, usually in retirement. You pay in a lump sum or over time, and in return the provider guarantees regular payments — trading savings for predictable income.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains an annuity.
Key things to understand
- 1It provides a steady, often lifelong, income stream.
- 2You fund it with a lump sum or regular payments.
- 3It's commonly used for retirement income.
- 4It trades a pot of savings for predictable payouts.
Frequently asked questions
- What is an annuity?
- A financial product that turns savings into a guaranteed stream of regular income, often for life.
- How does an annuity work?
- You pay a lump sum or installments to a provider, who then pays you regular income, typically in retirement.
- What's the downside of an annuity?
- Income can be lower than other investments, and money paid in is often locked away or hard to access.