In the simplest terms, an Annuity allows you a regular income for the rest of your life after swapping in your pension pot. What you do when you ‘purchase’ an annuity is basically swap you pension pot that has accumulated over the years you have saved for retirement for a guaranteed regular income.
If you are enrolled into an Occupational Pension scheme through your employer you typically do not have to do much as you employer will most likely take care of setting up your annuity. What About Personal Pensions?
If you have a Personal Pension than your pension provider will contact you once you have reached your retirement age.
Many people argue that Annuity rates are determined largely by the yield on government’s bonds known as yilds. Annuity providers (typically insurance companies) typically finance pensions by buying up government yilds.
Pensions & Annuities 
