It is a type of insurance policy that provides a regular income in exchange for a lump sum. On retirement, holders of personal pensions must use their pension pot to purchase one, after taking up to 25% of their fund as a tax-free lump sum if they wish. They can defer that purchase until age 75, by taking 'drawdown' from their pension, but eventually they must convert to an annuity. Their fund disappears, and the once-only purchase sets their income for life. The payout is based on the average length of time people this age group live, not the individual's health.
We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.
Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.
