One of the choices you will have to make when purchasing annuities is how often you receive your income.

A couple of the options are to receive the income monthly, annually, in arrears or in advance.

This decision will depend on your own individual circumstances; most people have monthly commitments with household bills, school fees for grandchildren and holiday planning funds to manage. Annual pension payments may only suit if you have additional income from other sources, for example, other pensions either personal or company, or from your spouse.

The benefits of receiving the income annually in arrears is that you may receive slightly more income than choosing monthly. The main disadvantages are that once you have made a decision, the annuity shape cannot be changed.

A review of your circumstances with an independent financial advisor can help to identify these issues and make sure the decisions you make will suit you now, and in the future.