what is an annuity ? thanks

These will help explain.

http://www.guardian.co.uk/money/2001/nov/27/annuities.pensionsfactsheet

http://www.moneypage.com/Investments/Annuities/What_Is_An_Annuity%3F.html

http://www.pensionsadvisoryservice.org.uk/Personal_and_Stakeholder

_Pensions/Annuities/

thanks i will check it out

once your lump sum is deposited in an annuity say £100,000 can you withdraw it at any point and either use it

as cash or deposit it in your mortgage? im worried that if i commit it to an annuity ive effectively lost it in exchange for

a yearly return so could not have any alternatives , i have no spouse but two family both under 23 years of age and i have

a mortgage of over £150,000 outstanding

thanks.

Normally an annuity is purchased as a result of a pension contract "maturing" either from early retirement or reaching normal pensionable age. .Once an annuity is set up the capital sum is "lost" in return for a guaranteed payment every year til death. If this £100k is a pension pot then there isn't much you can do with it anyway altho' a proportion (25%?) is available as a tax free sum on taking the pension. If its savings then with a £150k mortgage I would be looking to pay off a chunk before interest rates start to climb again!

so if i stick it into an annuity and unfortunately pass away , its lost, its gone and is of no value to my kids whereas if its in my mortgage its in my estate? they then inherit that ?

As far as I'm aware ?? you can't set up an annuity to pay your children an income after your death so it would be gone{altho' you can to a wife. nb joint annuities pay a lower %age income however)

Definitely better to reduce estate liabilities (ie mortgage) so that kids have greater inheritance.

was my thoughts from the start but its the old story i needed a second opinion and its appreciated many thanks