Annuity Calculator
If you want an approximation of how much income you could get from an annuity then you can use an annuity calculator. However an annuity calculator can only display an illustrative example of what kind of income level you might get when you purchase an annuity. It will not give you an accurate annuity quote because to do so requires taking detailed medication information, which of course cannot be given using a short online tool.
If you want to want to be sure of which annuity provider has the best rates, then you must speak to an annuity specialists such as ourselves. After taking your details, we will search the entire market of annuity providers to see who has the best rates. We have increased retirement income for many retirees, sometimes by as much as 40%.
If you do use an Annuity Calculator, below are some tips and advice over what information you will need.
The amount of money you will be offered from an annuity provider will depend on a number of key factors…
- Your age
- Pension fund size
- Healthy or unhealthy
- Male/female
- Your location
Age
By entering these options into an annuity calculator, you can see how your annuity income might increase or decrease. In general, the older you are, the more income you are likely to be offered. This is due to the fact that on average older people die sooner than those who are younger, so the annuity providers calculate that they are likely to pay you an income for a shorter time period. This is not absolute in every circumstance though, younger retirees with serious or long-term medical conditions may be offered better rates based on their individual circumstances.
Health
As previously mentioned, health is one of the key indicators that annuity providers look at when quoting for an annuity. Those who are unhealthy (defined as a person who has a medical condition or lifestyle choice that may shorten their life expectancy) are likely to get higher rates as a consequence. A typical example would be someone who smokes more than ten cigarettes a day for a prolonged period or someone who drinks heavy amounts of alcohol on a regular basis. Because these people will either have an existing medical condition due to these habits or are much more likely to develop one, they are offered better rates.
Gender
The average woman lives longer than the average man, so annuity providers (up until December 2012) used offer better rates to men as a consequence (on average). This was ruled as discriminatory by the ECJ who stated that annuity pricing must not include any gender bias. Although in theory this was meant to benefit women, the reality is it will only benefit single women, as 80% of annuities are bought by men for them and their partner/wife if they have one. Industry experts believe that the male rates are likely to fall as a consequence of the legislation, with rates for females rising slightly.
Location
Where you live in the UK also can also impact on the annuity rates you are offered from a provider. If you live in a more prosperous part of the UK, for example West London or the Home Counties, then your annuity offer could be lower compared to someone with the equivalent circumstances who lives in a more deprived area such as the North-East. Providers are looking at averages, and on average those who live in more deprived areas die sooner than those who live in more wealthy parts of the country. The difference in the average life span of a man living in east Glasgow compared to Kensington can be as much as thirteen years.
