Because of cross-subsidy and the guarantees an annuity can give against running out of income and becoming dependent on state welfare in old age, annuities often have a favourable tax treatment, which may affect how attractive they are relative to other investments.
Unsecured or alternatively secured pensions carry both the investment risk of the invested pension fund and mortality drag that occurs from the loss of cross-subsidy and advancing average age expectancy that occurs in the time over which annuity purchase is delayed.