The highest annuity available from pension funds is a single life, level payment pension with no guarantees. This may be fine for a single person who has no dependants and who is not concerned about the effects of inflation but it won't suit the majority of people.

For example let us say the pension annuity is £10,000 per year. Single life means that when you die your pension will die with you and level means it will stay the same, so in 10 years time it will still be £10,000 per year.

If you wanted some of the pension to go to a partner when you die, then you should include this in the pension contract, however the amount of initial pension you get will go down. It is also possible to include a pension for dependent children. The equivalent annuity with a 50% partner's pension might have a reduced initial income of say £8,000, but, £4,000 will be paid to your partner when you die. If your partner were to die first then the pension will die with you.

If you want the pension to increase each year then you can also add this facility however once again the amount of pension you will receive initially will be lower than one which does not increase. If you were to add index linking to the annuity as well as the partner's pension then an initial income of say, £6,000 could be anticipated.

You may also add a guarantee to your pension to ensure that the pension will pay an income for a predetermined period of time. This ensures that in the event of the annuitant's death a specific level of income will be paid to their dependants or estate. The most common guarantee periods are: 5 and 10 years. Adding the guarantee will reduce the initial income received.

The important thing is to decide what you must have included and then ensure that an independent adviser searches the whole of the market to get the maximum rate possible. If you are a smoker or ex-smoker or you are in poor health then an impaired life annuity is likely to increase your income further.