What is annuity

What is an annuity?

Annuities provide a secure guaranteed income, for your lifetime or for a fixed term of your choice. They can be used as the foundation of your retirement plan.

How do they work?

You invest some of your savings with Challenger and we pay you guaranteed regular payments for either a fixed period or for the rest of your life depending on the type of annuity you choose.

If you choose a Challenger lifetime annuity, we will continue to provide your payments for as long as you live.

Annuities are protected from share market and interest rate movements

Challenger annuities give you an additional layer of protection in retirement by providing guaranteed income payments. They act as a safety net helping ensure that you will receive income for life, or for a fixed term of your choice. As the rate of return is fixed at the outset, an annuity is not affected by how investment markets perform or interest rate movements.

Complements your retirement income

Challenger annuities are designed to complement other retirement investments and sources of income, such as account-based pensions and the Age Pension.

You can choose inflation linked income to help protect your lifestyle

Inflation measures the change in the cost of living over time. With level income, your retirement lifestyle could become unaffordable. Payments from Challenger annuities can be linked to yearly changes to inflation, helping you to continue to afford tomorrow what you can afford today.

With the security of an annuity helping you to pay for your essential expenses, you have more flexibility with how you manage your other investments for other discretionary spending, like on holidays and entertainment.

More information about annuities

See other features of annuities: Learn more

Important information

Information provided on the Challenger Websites is intended for Australian residents only and may not comply with the laws of other jurisdictions outside Australia. It is of a general nature and does not take into account an investor's individual circumstances, financial situation or needs or particular investment objectives. It is not intended to be investment advice nor a recommendation or statement of opinion about any particular financial product or class of financial products. As a result, it should not be relied upon in acquiring any financial product or service and is provided in good faith and derived from sources believed to be accurate and current at the date of publication. See Conditions of use for more information.