Inflation Proof Annuity

An inflation proof annuity is the only type of annuity that allows you to fully protect the buying power of your retirement income.

Annuity income

Your annuity income (before tax) will always keep its real value throughout your retirement removing the effects of inflation. Your income tracks the Retail Prices Index (RPI), so the buying power of your annuity income stays the same.

An inflation proof annuity income

These are similar to the advantages of a conventional annuity. An inflation proof annuity provides an income for the rest of your life – and protects the buying power of your income.

A lower initial annuity income

You’ll start off on a lower income than you would with a conventional annuity paying a level income, as the amount will be based on an expectation of what inflation might be over your expected lifetime.

Annuity payments could fall

If inflation falls below zero, your annuity payments from some providers might be reduced, unless you take out a guarantee against negative inflation at the start. This guarantee has a cost and can reduce your starting level of income.

You’re locked in at today’s interest rates for the rest of your life (annuity rates go up and down with interest rates, although this could be an advantage when annuity rates are high).

How an inflation proof annuity works

We are now tending to live for longer during retirement, so even low levels of inflation could significantly reduce your income in real terms over the period. By providing annual changes in line with the Retail Price Index (RPI), or equivalent index chosen by the Government, this annuity option ensures your income will keep its buying power throughout the course of your retirement.

To obtain your free, no obligation annuity quotes you can enquire online, or call us free on 0800 0124 374. One quick free phone call from you can make all the difference. We’re here Monday to Friday, 9 am to 6 pm.