It is a total scam! The average age of a male dieing is 83. If you have a pension pot of say £200K, after taking £50K lump sum you will get about £8400 from an annuity. So aged 65 you would after 18 years have had £151K out. This being £1k more than you put in! But the £150K would have been invested, say at 3.5% but the pension company would make a charge for administering it, so assume 1% of the fund. The figures show you would have to survive for 24 and a half years to recover what you paid in, ie 89. On top of this, interest rates are only like to go up, so it makes it even better for the insurance company. There should be an option for a re-evaluation of benefit each year, risky in times of high interest rates, less so now

Like some of the previous comments I believe that the only winners are insurance companies in regards to annuities.I think the government each April 6, should set an annual income limit and those that can demonstrate they have that income from a mixture of state 1st and 2nd pensions and private provision should be able to ring fence any other pension pots they have and take the interest earned.
Why should any insurance company be allowed to take the remaining balance after 5yrs +.The odds are always in the favour of the insurance companies.
None of the sites in respect of annuities tell you at what point you have to live too to beat the insurance expectations.

Like the first comment (freyajon), I agree but here's a more basic question - why has a pension got to be turned into an annuity before you can get a payout of YOUR pension??
Any financial expert care to advise?
or is it because it's tied up in pension arrangements where you have to convert the pension into an annuity, one winner is the Annuity (another) financial advisor (who in my case was a Consultant specialising in the Annuity field - whose advice/costs don't come cheap!! (& guess who is the loser!!)

I'm currently in the process of arranging an annuity and fully agree that the pensions sector is a confusing nightmare - and I'm quite well informed having worked in the financial services sector for many years. Like me, anyone who saves for a pension througout a working lifetime, should have the free choice and discretion to pass on pension fund benefits to whoever they choose. I'm able to arrange a pension for my lifetime and pass this income benefit 100% onto my wife for her lifetime should she survive me. However, should we both unfortunately die, then the remaining value of our pension funds are lost forever, and I do wonder who gets any remaining monies? This can't be right! Pensions legislation needs changing asap enabling pension funds to be transferred, through a Will, as part of an Estate, just like any other personal asset. Pensions detail should also become significantly simplified so that it can be easily understood and processed.