What is the Annuity Rate

The annuity rate is the mathematical rate at which the pension fund you have accumulated is converted into the pension you have chosen for yourself.

It takes into consideration your age and the number of years (potentially) that you may be receiving a pension, and the type of pension you require. At the moment you can purchase an annuity from the age of 50 but the younger you are the lower the annuity rate will be.

This means that the younger you are when you decide to draw your pension, the smaller your pension will be than say, if you were to compare the pension you receive, with someone who has the same size pension fund but is older than you.

The Financial Services Authority publish comparative Annuity tables on their website. If you would like to view these tables please click here