QUESTION:
So how is my ‘income for life’ calculated?



ANSWER:
This is the crucial question and the answer depends on a variety of different factors. The simplest is the size of the pension fund you have built up so far – obviously the bigger the fund the higher your income payments are likely to be. But this is just the start. Your choice of annuity provider will also make a big difference as some companies are far more generous than others. Independent advisers such as The Annuity Bureau and Annuity Direct say the same fund will can produce between 15 and 30 per cent a year more with some companies than it does with others. Pick the wrong one and you will be tied into a low income deal for the rest of your life.