Despite the recent wave of deal activity and de-risking around annuity portfolios, there remains a high exposure to longevity risk in both the UK pension and insurance industries. Risk-based capital requirements can be onerous, especially when combined with the requirements for credit risk associated with the underlying asset portfolio. Additionally, the ongoing Solvency II debate has generated significant uncertainty for the industry around the long-term capital requirements of annuity writers. This paper provides some background on market developments and describes the options available to annuity writers for managing risk and capital.