Pension Annuity Calculator

Base Rate: The starting annuity rate depends on your age. Older annuitants receive higher rates because the provider expects to pay out for fewer years. The base rate at age 65 is approximately 7.75%, increasing by roughly 0.3% for each year of age above 55.

Tax-Free Cash: You can take up to 25% of your pension pot as a tax-free lump sum. The remaining amount is used to purchase the annuity.

Joint Life: Choosing a joint life annuity reduces your income because the provider may need to continue paying your spouse after your death. A 50% spouse's pension reduces income by approximately 6%, while 100% reduces it by approximately 13%.

Escalation: A level annuity pays the highest starting income but does not increase. Choosing 3% annual increases reduces starting income by approximately 26%. RPI-linked (~2.5%) reduces it by approximately 22%.

Guarantee Period: A guarantee ensures payments continue for a minimum period even if you die early. A 5-year guarantee has minimal impact (~1% reduction), while 10 years reduces income by approximately 3% and 30 years by approximately 12%.

Enhanced Annuity: If you have health conditions or lifestyle factors (such as smoking), providers may offer a higher rate - typically 15% to 30% more - because your life expectancy is statistically shorter.

These are indicative figures only. Actual annuity rates depend on provider, market conditions, and your personal circumstances. Always shop around using the open market option.