Those about to retire don't necessarily need to take an annuity, as some can take monies directly from their pension.
However, annuities present a secure option for maintaining a steady income during retirement. You should consider the pros and cons of setting up an annuity plan carefully. If you decide against an annuity, we would suggest seeking independent financial advice for your retirement.
You don’t have to start using your retirement income the day you retire. Government regulations no longer state you have to buy your pension annuity by the time you turn 75, although keeping your funds in a pension pot after this time may result in some tax charges. If you do decide to delay taking your pension income, you may be able to save more into your pension fund and thus have a larger pot when you do want to cash it in. As a general rule. the oldlater you are when you come to retire, the more income you'll get.
You don’t have to buy a single annuity either; if you have £100,000 in your pension fund you could purchase four annuities for £25,000 each.