Drewberry™ provide pensions, investment and insurance advice for Money to the Masses readers throughout the UK.

Pension Annuities Calculator 2017

Annuity Calculator 2017

Annuity rates determine how much pension income you’ll receive in retirement based on the size of your current pension pot. If an annuities calculator offers you an annuity of £5,000 from a £100,000 pension pot, this is an annuity rate of 5%.

Your annuity rate is calculated based on various different factors. These include the size of your current pension pot, your age, state of health and smoker status.

When you buy an annuity, you exchange all or part of your accumulated defined contribution pension pot for a regular income for the rest of your life.

Unfortunately, rates are low in the current economic climate. That’s why it’s important to compare annuity rates from across the market using a tool such as Drewberry’s free Annuity Quote tool to make sure you find the best possible deal for your retirement.

Compare Top 10 Annuity Rates
 
Takes approx. 60 seconds
Pension Fund
Date of Birth
Smoker
 

UK Annuity Rates Calculator

Although the pension freedoms of 2015 mean that it’s no longer a requirement to buy an annuity if you don’t want to, it’s worth calculating your pension annuity anyway to see the retirement income your pension pot might buy you.

Drewberry’s Annuity Calculator is completely free and will instantly compare annuity quotes from most of the UK’s major providers.

The calculator will give you a rough idea of how you could fare in retirement if you decide to go down this route.

Annuity rates are calculated based on a number of different factors, including:

  • Your age – the older you are when you buy an annuity pension the better your annuity rate, as the company assumes they’ll be paying out an income for less time.
  • Your health – if you’re in poor health, consider an enhanced annuity for a better annuity rate.
  • Your smoker status – smokers get better annuity rates because of their higher mortality risk, and may also quality for enhanced annuities.
  • Whether you want a joint annuity – this will provide a pension for a partner after you pass away.
  • If you want to index-link your annuity – an index-linked or escalating annuity pension receives a lower annuity rate initially to compensate for the fact that it will rise over time to maintain pace with inflation.
  • Your postcode – different parts of the country have different life expectancy, so your annuity rate will be based on your home postcode.
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Compare Annuity Providers

It’s important you look across the market to find the best annuity for your needs. Many people simply choose the annuity offered to them by their pension provider, which may not offer the most favourable rate. Below is a list of some of the UK’s top retirement annuity companies our calculator compares on your behalf.

Top UK Annuity Pension Providers
aviva retirement annuity rates

Aviva

Known as Norwich Union until 2000, Aviva is one of the UK’s most-recognisable financial services brands. It’s also the UK’s biggest insurer. Aviva annuities are part of its wider pensions and wealth proposition.

Canada Life annuities

Canada Life

Although headquartered in Toronto, Canada Life nonetheless has a strong UK presence, active here since 1903. Canada Life annuities include both lifetime and fixed-term options. In August 2017, Canada Life further strengthened its UK footprint when it agreed to purchase Retirement Advantage, another major UK provider.

Just Retirement annuity calculator

Just Retirement

JUST was born from a merger between Partnership Assurance and Just Retirement in 2017. Previously, JUST Annuities were sold under both the Just Retirement and Partnership brands.

Legal and General Lifetime Annuity Rates

Legal & General

Founded in 1836 as a Life Insurance company for lawyers, Legal & General has since expanded into one of the country’s most-recognisable financial services brands. L&G is currently one of the UK’s top annuity providers.

Calculate LV's annuity rates

Liverpool Victoria

LV was founded in 1843 and is one of the UK’s biggest general insurers. It also has a sizeable life and pensions division offering Liverpool Victoria annuities and other pension solutions.

Old Mutual

Old Mutual

London-based Old Mutual was founded in South Africa in 1845. Today it’s a global investment, savings and bancassurance provider. As well as offering its UK customers financial services, including annuities, Old Mutual also owns and operates the Intrinsic financial adviser network.

Scottish Widows Annuities

Scottish Widows

Scottish Widows became part of Lloyds Banking Group – which has been trading since 1765 – in 2009. Providing insurance in the UK since 1815, Scottish Widows itself is an old, well-established brand and offers pensions and annuities to UK customers from its Edinburgh headquarters.

Compare Top 10 Annuity Rates
  Takes approx. 60 seconds
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Calculate How Much Annuity Your Pension Will Buy

Your annuity factor may be expressed as a percentage – e.g. if you get a £5,000 pension income from a £100,000 pension pot, it’s a rate of 5%. Alternatively, you may see your annuity rate expressed in terms of income, so a rate of 3% means you’d get £300 for every £10,000 invested.

ask Jonathan cooper, senior paraplanner at drewberry, for annuities advice

How much annuity your pension will buy depends entirely on your circumstances. When calculating your rate, the annuity formula is incredibly personalised to your needs. It will take into account a variety of lifestyle factors and the size of your pension pot to work out how much your retirement income will be worth.

Jonathan Cooper
Senior Paraplanner at Drewberry

 

Annuity Factor Table 2017

Total Pension Pot

60 Years Old

70 Years Old

75 Years Old

£100,000

Aviva£3,403 p.a.

Legal & General£3,898 p.a.

Canada Life£4,450 p.a.

£250,000

Aviva£8,539 p.a.

Legal & General£9,688 p.a.

Aviva£11,063 p.a.

£500,000

Canada Life £16,876 p.a.

Canada Life £19,319 p.a.

Aviva£22,030 p.a.

£1 million

Aviva£33,487 p.a.

Canada Life£38,235 p.a.

Canada Life£43,473 p.a.

Annuity rates represent the top quotes and are accurate as of October 10, 2017

As pension annuity rates are entirely tailored to you and your circumstances, to provide these sample rates, we’ve had to make a number of assumptions about the individual buying them.

The biggest assumption we’ve made is that they’ve taken their full 25% tax-free pension commencement lump sum from their total pension pot before buying the annuity. So for a £1 million pension pot, they’d be purchasing a retirement annuity with £750,000.

The other assumptions we’ve made include:

  • They’ve bought a single annuity
  • They’re in good health with non pre-existing conditions
  • They don’t smoke
  • They don’t want a guarantee period so payments will continue after their death
  • They live in East Sussex, in the same postcode as our Brighton-based financial advisers.
Best annuity rate

Calculate and Compare the Best Retirement Annuity Quotes

We’ve pulled the above retirement quotes from our UK Annuity Calculator. You can go to the various pension providers and get annuity quotes from all of them individually, but why bother when there’s a calculator to do the legwork?

Drewberry checks the annuity prices offered by all of the UK’s leading companies so you can be confident you’re getting the best deal on the market today.

Neil Adams
Pensions & Investments Expert at Drewberry

Very happy with the advice I received from Jake Beale at Drewberry on my income protection. All sorted in two short easy phone calls.

Phil Walker
07/11/2017
Is an annuity the best pension for me?

Is Buying an Annuity Right for Me?

Without looking into your circumstances and offering regulated retirement advice, it’s hard to know whether or not you should buy a pension annuity.  This is because a lifetime annuity rate – and therefore how much pension you’ll get – is dependent on a variety of factors that are very much personal to you.

However, what is true is that annuity rates have fallen in recent years. Low interest rates and low yields on UK government bonds have hit providers hard. That means the annuity formula used today to calculate rates is currently poor, perhaps more so than it’s ever been.

Despite this, buying an annuity might still be right for you if:

  • You want a lifelong, guaranteed and inflation-proof retirement income.
  • You don’t want to take on investment risk, even if it means higher returns.
  • Your pension pot is small and might run out too fast with income drawdown.
  • You’re ill or you smoke – here an enhanced annuity is often possible to get a better annuity rate.
  • After your death, you want to provide a pension income for a spouse or partner who has little or nothing in the way of their own retirement savings.
  • Your pension provider offers a guaranteed annuity rate – sometimes old defined contribution pensions offer a an annuity rate far better than you’d get currently on the open market.
casey goodwin, wealth and pensions administrator, is part of drewberry's pension advice team

Fortunately, if today’s low annuity rates have put you off buying one a lifetime annuity is not your only option. It’s true that annuities offer the most security, with a guaranteed retirement income for life. However, the low rate environment and the 2015 pension freedoms have seen more people consider an alternative to annuities – pension income drawdown.

Casey Goodwin
Wealth & Pensions Administrator at Drewberry

The main point to remember about buying a pension annuity is that, once you do, you can’t go back and change your mind. Lifetime annuities are permanent investments.

While you can’t go back and undo an annuity, you have more flexibility with pension drawdown. You can opt to take flexible lump sums and income payments in the early years of retirement and then switch to a retirement annuity later if you wish.

Flexi-access drawdown and annuities are two very different retirement options and it’s important you understand the pros and cons of both before proceeding. That’s where the team at Drewberry can help.

Compare Top 10 Annuity Rates
  Takes approx. 60 seconds
 - 
Need help? 
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Expert pension and retirement advice

Expert Advice getting the Best Annuity

It’s worth getting advice when looking for the best pension for you. While an annuity might be right for some people, for others – such as those who want an easy way to pass down their pension or are keen for investment growth in retirement – it may not be the best option.

Drewberry has a team of experts on hand to help you with pension and retirement planning. All you need to do is pop us a call on 02084327333.

Tom Conner
Director at Drewberry

Compare Top 10 Annuity Rates
 
Takes approx. 60 seconds
Pension Fund
Date of Birth
Smoker

Frequently Asked Pensions Advice Questions

 
My husband is a stay-at-home father to our four children while I go out to work, but I’m not sure...
 
I like the idea of being able to leave my unspent pension to my son and two daughters and my five grandchildren...
 
I’m a bit confused about the new pension drawdown rules. What’s the difference between flexi-access...
 
I’m a 50-year-old woman. There seem to have been so many changes to the state pension age recently...
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