The world of property investment can sometimes be confusing; our Glossary is full of useful terms to help every investor, whether they are a first time landlord or a seasoned portfolio builder.



A fixed sum of money that is paid out to you by a chosen insurance company as an annual income until you die. In general there are different types of annuity that you can buy:

  • Single: pays a high level of income, but will stop upon the pension-holder’s death.
  • Joint: continues paying a fixed percentage of an individual’s income to their spouse upon the pension-holder’s death for the duration of the annuity.
  • Guaranteed period: guaranteed for a specified period of time, regardless of the death of the pension-holder (in which case it would be transferred to a named beneficiary).
  • Annuity protection: guarantees that, if you die before the age of 75, the balance of a pre-arranged percentage of your annuity will be available in a lump-sum (taxable at 35%).
  • Escalation: increases each year to keep up with the rising cost of living, rather than remaining static over the course of retirement.
  • Overlap: if an individual has both a joint annuity and a guarantee period, there is the option of an overlap, meaning that, should their spouse die, the surviving partner would receive their spouse’s pension alongside their own.

Within these options, there are a number of variables that can affect your annuity and provide a level of personalisation. For example, you can get an impaired life or enhanced annuity that pays more if the owner has certain medical conditions that diminish life expectancy, a postcode annuity based on the average life expectancy of the area in which the owner lives, an investment-based annuity which is correlated with the investment market, or a Purchased Life Annuity (PLA) which is purchased with money not tied to your pension pot. You can even purchase a temporary annuity which provides payment for a fixed term, up to a maximum of 5 years, if you didn’t want to commit to a lifetime annuity.


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