Should I opt for an index-linked annuity?

Do index linked annuities rise with inflation? Are these generally the best annuity to go for?

Question asked by Kay Rivers
Compare Top 10 Annuity Rates
 
Takes approx. 60 seconds
Pension Fund
Date of Birth
Loading your options...
Thank you for using our Quote Tool
If you need some help, just call us!
T: 02084327334
Our in-house Experts are here to provide FREE impartial advice!
Our Experts can answer all your questions
Our Experts can send you more appropriate options based on your personal circumstances

Very important if you are either Self-Employed or a Company Director.

Our online quote tool is good but our Experts are better

Oue Experts have access to far more insurers and can often find a better deal offline.

Saves you time, let our Experts do what they are best at
Smoker

Answered by Tom Conner

Like a conventional annuity, index-linked annuities are designed to provide you with a regular income in retirement.

However, index-linked annuities ensure that your income increases each year in line with inflation, so that your spending power keeps pace with the cost of living.

You income is usually linked to the Retail Prices Index (RPI), one of the government’s measures of inflation.

Drawback of index linked annuity

One of the drawbacks of going for an index-linked annuity is that initially your income is usually much lower than it would have been if you’d gone for a level or fixed annuity.

If inflation remains low, then it could take some time for an index-linked annuity to pay the same or more income as a standard annuity, although later on your payments should end up higher than the payments you’d get from a level annuity.

Always seek professional financial advice if you aren’t certain which annuity to go for. We are here to help and can provide this advice if needed.

index linked annuity
 
RPI linked annuity
 
retirement planning
 
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
Compare Top 10 Annuity Rates
  Takes approx. 60 seconds
 - 
Need help? 
Call us on 

Frequently Asked Pensions Advice Questions

 
I am an IT contractor with my own limited company contracting into other companies for work. I was wondering...
 
My pension says it has a guaranteed annuity rate, what does this mean and is there anything I should...
 
Could you explain to me what the annual allowance is and what it means for my pension? Also, I’ve...
 
I’m a bit worried my private pension fund won’t last long enough, how do I prevent it...
Need Help? Live chat now and get an instant answer from our Experts...

Neil
Pensions

Victoria
Insurance
Our Latest Reviews
Matthew Draper
11/07/2018

Excellent service at convenient times of the day specified by me. All product options were clearly outlined and I am very pleased.

Paul Devine
10/07/2018

First class service. Helped me through the process from start to finish. Egle and Francis were very professional and talked me though all my options. Once the policies were set up, the after care after was also first class. Highly recommend. 5 stars all day long.

Josip Marjanovich
03/07/2018

Victoria was very helpful about selection of suitable insurance. She always answered all questions in a timely manner.

We are rated 4.9/5 based on 1512 independent client reviews.
To read more of our independent client reviews click here →
REVIEWS
EXCELLENT
4.93 / 5 Average
652 Reviews
Verified Buyer
Overall Rating
The whole process was a pleasure. Drewberry we're easy to deal with, polite, knowledgeable and helpful
Verified Buyer
Overall Rating
Very good, clear service would recommend to friends and family
Anon
Overall Rating
Sam Carr provided an efficient and professional service.
Verified Buyer
Overall Rating
Sam Carr provided a professional but enthusiastic service and helped make the whole process very straight forward. Goodness knows I have been through enough application forms recently. My insurance product was never going to be easy to find and I had been rejected on a number of other occasions through others ironically due to well managed common health conditions. I identified Drewberry in a last and disappointing trawl on th web to find someone that actually wanted to take on a difficult case like me. Some brokers wouldn't even consider me. When we applied for my first choice product Sam wasn't at all deterred by the long wait for my GP report or the final rejection that came back from the insurer, sadly I have become used to it. Within a day he had lined up the second choice and to my surprise he had hit the nail on the head and introduced me to the correct insurer and terms for my needs whilst nogotiating an excellent premium. I am extremely satisfied with what Sam has achieved for me and I would have no hesitation in recommending either him or Drewberry to friends, family and and business contacts. In the future, Drewberry will be my first point of contact. Many thanks!
Kym
Overall Rating
Tailored to my need and the staff gave very good service