1. I’ve already bought an annuity. What can I do?

You can change your mind if you are still within your ‘cooling off’ period. Check your paperwork. You should have 30 days to change your mind from when your instruction to proceed was validly accepted by the annuity provider. Actual practice will vary from company to company on what the start date trigger is.

If you are outside your normal cooling off period then the annuity purchase cannot usually be reversed. But some providers are extending the period and you should telephone them now to check.

2. I was going to buy an annuity but should I change my mind now?

Possibly, it depends on your circumstances but there are risks to think about.

If you are doing it to take advantage of the total flexibility promised for April 2015, there is no guarantee that this promise will make it into law.

If the new rules that apply from 27 March 2014 apply to you then it is worth considering whether they are better for you than an annuity.

In cancelling your annuity purchase to consider other options you may well lose the annuity rate you have been offered. Make doubly sure that you aren’t in the group of roughly 1 in 8 that benefits from guaranteed annuity rates which often are very generous. In rejecting such a rate, you might lose the ability to take it in future.

There are other options to take retirement income while you decide on whether to buy an annuity now or possibly later. We strongly recommend you take independent financial advice if in any doubt what to do.

3. Isn’t taking advice expensive?

Someone buying an annuity with £50,000 might pay between £750 and £1,500 commission to the broker who sells the annuity. This money is taken from your pension pot once you buy the annuity.

Payment for financial advice can also be taken from your pension. Financial advice on whether or not to take the annuity might cost in the region of £1,000 -£1,500 depending on the complexity of your needs.

You might find that paying for advice is no more expensive than the commission. If you do pay a little more, say £400, to purchase the annuity after advice then that need not be taken in cash from you. It can come from your fund which would reduce your retirement income by c. £2 a month relative to not taking advice.

The question is would you rather do all the work assessing your options and take full responsibility for the decision or pay an adviser to do this for you?

You might save £2 a month doing it yourself, assuming you reached the right answer, but we would say a good independent financial adviser is well worth using.

4. Won’t I get free advice under the new rules?

From April 2015, the intention is to require your pension provider to make available impartial expert guidance. Note the word guidance not advice. Advice means someone taking professional responsibility to recommend to you what you should do to meet your needs. Guidance is giving you factual information to allow you to make your own mind up.

You will still pay a commission to buy the annuity after receiving the ‘free guidance’ so really this just helps you understand your options better before deciding to buy or pay for advice on what to do.

5. Some of these annuity companies have seen their share price drop. Are they still safe to use?

It is possible that the owners of these companies may change their business plans if the share price falls are sustained. It is too early to say whether this is a blip or a permanent change in business outlook. A change in business plans such as the amount of capital the owners are willing to inject or the amount of business they write could affect the security they provide going forward.

However to continue to accept annuity business they must satisfy the regulator that they hold enough capital to meet their obligations and stress test that to make sure it covers 199 in 200 eventualities.

People buying an annuity should pay more attention to the relative security offered by each annuity company as well as the price that is offered. Expert financial advice can help you understand the trade off between price and security.

Alan Higham is head of retirement insight at Fidelity, and also Chairman of Annuity Direct