For this question, the right answer is personal and mainly depends upon the circumstances of the individual concerned. The way that an individual budgets for their day to day life would probably mirror the most appropriate payment period of the annuity.
When an annuity provider quotes the rates for annuities they will normally give the quote for an annual income and there will not normally be any difference if you take that income annually or monthly.
So then if you budget monthly and you wish to access a monthly income, it may well be worth calculating the advantages of taking the annual amount. Is it then worth putting it in your own bank and drawing off a monthly amount whilst earning interest at the same time? It certainly is worth considering and comparing the extra interest to be earned against the extra administration created.
One of the main influences that do affect the level of pension from exactly the same size of pension fund is whether you decide to take the pension in advance or whether you take it in arrears. Taking a pension in arrears will give a higher pension than taking a pension in advance, purely because the annuity provider will be holding onto your fund for longer.
This means that retirement planning at actual retirement can be a very complex area because there are a number of areas to consider before the type of retirement income vehicle can be chosen. Age, health, attitude to investment risk, dependants, life expectancy, financial outlook are all aspects that need to be considered. The advisers at The Money Map in Sheffield are experts in retirement planning and offer a comprehensive service for those planning for or at retirement.