Saga Annuity service
How much annuity income will be paid to me?
The income you receive from your annuity will depend on a number of factors. The larger the fund available to purchase an annuity, the greater the level of income achievable.
However, this is not the only aspect to be considered. Other factors that are considered are:
Type of annuity
Depending on the type of annuity you take and the features that it offers, such as guarantees, payment escalation etc. your income may vary. Usually the additional features may reduce the value of the income you receive.
The amount of tax free cash you decide to take
The amount of tax free lump sum that you take will reduce the pension amount available to buy an annuity. The lower the fund value the lower the annual income you may receive.
Your age
Your age when you initially take out your annuity is also a very important factor. The younger you are when you take out the annuity the longer the insurance company will expect to pay you. Therefore, the younger you are, the lower your retirement income payments will be.
Your gender
Men tend to be offered a higher level of income than women, as women are generally expected to live longer.
Your health and lifestyle
If your health is poor you can significantly improve your income by selecting the right type of annuity. Sometimes your lifestyle can help you get a better income rate, for example if you are a smoker or have weight related problems. It is important that you disclose all details on your health to your advisor, so we can find the best annuity for you. Our experience shows that a 59–year–old man with health problems could receive a rate 70% higher through Openwork Market Solutions. Source: Openwork Market Solutions.
Economic climate
Another factor to take into consideration is the economic climate at the time you take out your annuity. If you take out your annuity when interest rates are low, the insurance companies will offer a lower annuity rate – this means that the capital sum will not provide as large an annual income as when interest rates are higher.