Postcode Annuities

Many of the UK’s biggest insurance companies now take your postcode into account when calculating your retirement income. This can make a difference of up to 10% to your income.

Postcode rated annuities

Someone living in what constitutes a ‘healthy’ or ‘wealthy’ postcode area is statistically likely to live longer than someone living in what might be termed a ‘less healthy’ or ‘less wealthy’ postcode area. 

Therefore, if you live in a ‘less healthy’ or ‘less wealthy’ area you can expect to receive higher payments from an insurance company, as they’ll expect to pay you that income for less time.

There could be a 5%-7% difference in the retirement income payable by some companies, and up to 10% with others, depending on where you live.*

For example, average male life expectancy in central Glasgow, is 70.7 years, whereas in London’s wealthy areas of Kensington and Chelsea it is 84.3 years, according to official data. This suggests that a person living around London could expect to live for an extra 14 years (approximate) and therefore they would have to expect a lower retirement income.**

Those people living in several parts of Scotland (Glasgow City, West Dunbartonshire, and the Outer Hebrides, for example), plus Belfast, Blackpool and Manchester, are among those who potentially stand to gain the most from the change in which retirement incomes rates are now being calculated.

*Information taken from the FSA’s annuity tables, November, 2011.

**Information taken from data supplied by the Office for National Statistics.