Annuity
A type of insurance policy that employees can buy from an insurer, often their pension scheme provider, at retirement using their pension savings in return for an income for life.
Enhanced annuity
Works in the same way as a standard annuity, but offers better income levels for employees in poor health, caused by illnesses such as diabetes or cancer, because of their lower life expectancy.
Open market option
This involves employees buying an annuity from the open market, which means they can choose any annuity provider, not just their current pension scheme provider.
Drawdown
This allows pension scheme members to draw down their pension while it remains invested.
