annuity
C1Formal; Technical (Finance/Economics)
Definition
Meaning
A fixed sum of money paid to someone each year for a specified period or for life.
A financial product, typically provided by an insurance company, that pays out a regular income stream in return for an initial lump-sum investment. This stream can be guaranteed for a fixed term or for the rest of the recipient's life.
Linguistics
Semantic Notes
Central concept: regular, periodic payments. Often implies a long-term or lifetime financial arrangement, typically associated with retirement planning or structured settlements.
Dialectal Variation
British vs American Usage
Differences
No significant lexical or structural differences. The financial products are regulated differently, but the term usage is identical.
Connotations
Neutral financial/technical term in both varieties.
Frequency
Equally common in financial and retirement planning contexts in both the UK and US.
Vocabulary
Collocations
Grammar
Valency Patterns
to purchase/buy an annuityto receive an annuityto be paid an annuityto convert a pension into an annuityan annuity from (a provider)Vocabulary
Synonyms
Strong
Neutral
Weak
Vocabulary
Antonyms
Usage
Context Usage
Business
The firm offers a range of annuity products for retirees.
Academic
The study analysed the net present value of a deferred lifetime annuity.
Everyday
Her grandmother lives on a small annuity from an old insurance policy.
Technical
The immediate annuity was purchased with a single premium and began payments in the next contract period.
Examples
By Part of Speech
verb
British English
- The pension pot was annuitised to provide a guaranteed income.
American English
- He decided to annuitize his retirement savings.
adjective
British English
- They discussed the annuity options available.
American English
- The annuity contract had favourable terms.
Examples
By CEFR Level
- He gets a small annuity every month from his old job.
- After retiring, she used her savings to purchase a lifetime annuity for financial security.
- The variable annuity's returns are linked to the performance of a selected investment fund, introducing an element of risk to the income stream.
Learning
Memory Aids
Mnemonic
Think of ANNUITY like ANNUAL + CITY. Imagine a city that pays you an ANNUAL sum of money.
Conceptual Metaphor
FINANCIAL SECURITY IS A STEADY STREAM (of income).
Watch out
Common Pitfalls
Translation Traps (for Russian speakers)
- Avoid confusing with 'ренда' (rent) or 'аренда' (lease).
- The Russian financial term 'аннуитет' is a direct cognate but is often used more narrowly for loan repayment schedules.
- Do not translate as 'ежегодная выплата' in formal financial contexts; use 'аннуитет'.
Common Mistakes
- Misspelling as 'anuity' (single 'n').
- Using it as a countable noun for a single payment (e.g., 'I received my annuity today' is ambiguous; better: 'I received my annuity payment today').
- Confusing 'annuity' (a product/contract) with 'pension' (a broader retirement scheme).
Practice
Quiz
What is the core characteristic of an annuity?
FAQ
Frequently Asked Questions
Not exactly. A pension is a general retirement plan. An annuity is a specific financial product, often bought with pension savings, that provides the regular income.
It depends on the type. A 'life annuity' pays until you die, so you cannot outlive it. A 'term-certain annuity' pays only for a fixed number of years.
Annuities are primarily sold by insurance companies.
A key disadvantage is the potential loss of liquidity; once you purchase an annuity, you usually cannot get your lump sum back.