A fixed-term annuity, also known as a short-term annuity, converts your pension pot into a fixed income for a specified term, followed by a guaranteed amount, known as a “maturity value”. You can choose whether to receive your income monthly, quarterly, or annually. The income amount you receive will be based on the size of your lump sum, the term length, your pension provider’s annuity rates together with your age and state of health.
This product offers the security of a regular retirement income together with the freedom to choose a different product down the line. Fixed-term annuities typically last 5-10 years, although the term can be up to 20 years.