How is my annuity income calculated?
Dealing with pensions and annuities can often be a stressful process for the individual and this is because there is no generic annuity amount – everyone is different. Depending on your own circumstances and situation you could be eligible for a completely different amount of income compared to the person next to you and accordingly you may consider shopping around to find an annuity plan that suits you.
There are a number of different elements that are taken into account when considering your annuity income and on top of this you need to consider any additional factors that are a part of your annuity income including whether you take out a single or joint life annuity,
What are some of the key factors taken into consideration?
There are a number of different key factors that can influence the amount of annuity income that you are entitled to and these include:
- Location – where you live has a direct impact on your life expectancy and therefore where you live could indirectly affect your annuity income, leaving you with a higher or lower income simply depending on which postcode you live in
- Health – your health is a big factor in your annuity income. Your health helps to determine your predicted life expectancy and accordingly your level of annuity income
- Lifestyle factors – there are various lifestyle factors which can have an impact on your life expectancy and therefore your annuity income. If you smoke or drink heavily then you could be eligible for a higher annuity income
- Age – your age is another factor that can have an impact on your life expectancy and accordingly your annuity income.
Why is it worth shopping around?
Shopping around for an annuity can really save you money in the long term and can help to generate a higher annuity income than you might get otherwise. Different annuity providers can offer you different options depending on your individual circumstances and you may find one that benefits you in the long term. Shopping around for an annuity can present you with better options and opportunities, and in the long term a higher annuity income.