An investment, purchased with a lump sum that guarantees to pay
a set income for either an agreed number of years, or for life.
Generally, your money is locked away for a fixed period or for
life, though some annuities allow early withdrawals or for a
'residual capital value'. There is no capital left at the end
of the specified period. The income payments may be indexed each
year, often in line with inflation. Some annuities allow for
Last updated: 26 Feb 2016