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Annuities

What are the pros and cons of investing in annuities?

Annuities are locked in after being purchased which is both a pro and a con. On one hand, this means that they can be relied upon and people, especially pensioners need not worry about outliving the annuity (depending on the option chosen) but on the other hand it means that a large sum of money has been tied up into this investment product. There are often fees (usually decreasing over time) if you wish to get out of an annuity. Therefore, the illiquid nature of annuities can be both appealing and frustrating.

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