Annuity Income Comparison
Annuity Income Comparison
Compare annuity income options side by side.
Compare annuity income options side by side.
Compare up to four annuity scenarios side-by-side to identify when cumulative benefits converge and which option delivers best value over time.
Income per year for each option (£), growing at the escalation rate
Total value received (income + lump sum) accumulated over time
This guide explains what each part of the tool does and how to read the outputs — so you can have a clear, informed conversation about which annuity option is right for you.
Start by confirming your name and pension value with your adviser — these will already be filled in for you. Select the health basis and policy type (e.g. Joint Life). These affect the income quotes and will have been discussed with you beforehand.
Enter the current ages of both pensioners (if joint life) and the year the annuity starts. The escalation rate is how much the income grows each year. The inflation rate is used for context only — it helps frame whether income keeps pace with the cost of living over time. Set the projection end age to how far ahead you want to model (typically 100–110).
Each option represents a different annuity quote. Enter the annual income figure and any tax-free cash (lump sum) taken. Options A and B are always shown; Options C and D are optional — they disappear from all outputs if left at zero, keeping the comparison clean. You can rename each option to match the provider or scenario.
The tool instantly generates a Year 1 summary, crossover analysis, charts and a full year-by-year projection table. Use the Income / Cumulative / Both toggle on the table to switch views. Click Download Excel for a full data export, or Print / PDF for a formatted report.
This is the value of your pension pot that will be used to purchase your annuity. Your adviser will have confirmed this figure with your pension provider. The size of your pot directly affects how much income each option can generate.
Enter the age of the main pensioner and, if applicable, their spouse or partner. Joint Life 100% means the full income continues to the survivor. Joint Life 50% means half the income continues. Single Life pays income to one person only and stops on death.
The rate at which the annuity income increases each year. A rate of 3% means income grows by 3% annually. Higher escalation gives better protection against inflation in later years, but the starting income is lower. The projection table and charts show this growth year by year.
Annuity providers may offer higher income to clients with certain medical conditions — these are called enhanced or impaired life annuities. If applicable, select "Enhanced rates" and your adviser will ensure the quotes entered reflect this. Even common conditions like high blood pressure or diabetes can improve the rate offered.
Up to 25% of your pension pot can usually be taken as a tax-free lump sum. Taking TFC reduces the amount left to buy annuity income, so your ongoing income will be lower. The tool compares scenarios where different amounts of TFC are taken, showing the long-term trade-off between a lump sum today and higher income tomorrow.
Each option represents a different annuity arrangement — for example, different levels of TFC, different providers, or different escalation rates. Options A and B are always required. Options C and D are optional: simply leave their income and TFC at zero and they will be hidden across all outputs and downloads.
A reference guide explaining what each section of the comparison shows, and a glossary of key terms used throughout.
Shows the starting annual income, lump sum taken, and total first-year benefit for each active option. A snapshot of what you receive in the very first year — useful for comparing initial value side by side.
Shows the age at which the cumulative total received from one option overtakes another. An option with more TFC starts ahead cumulatively, but a higher income option will eventually overtake it.
Two charts side by side:
The full projection table shows every year from your starting age to the chosen end age. Use the three view modes:
The Best column highlights which option holds the cumulative lead in each year — this shifts over time as higher-income options overtake those with more TFC.
A guide to using this tool and understanding what each input means
Step 1 — Your Details: Your name and pension value will be shown at the top, confirmed with your adviser beforehand. The health basis and policy type (e.g. Joint Life) affect the income rates available to you.
Step 2 — Ages & Assumptions: Your current age (and your partner's, if joint life), the year the annuity starts, and the escalation rate — how much income grows each year. A higher escalation rate means a lower starting income but better long-term protection.
Step 3 — The Options: Each option (A, B, and optionally C and D) shows a different annuity quote. Options differ in how much tax-free cash is taken upfront versus how much is left to generate income.
Step 4 — Review the Results: The tool shows a Year 1 summary, crossover analysis, charts, and a full year-by-year projection table — all explained on the following page.
The value of your pension pot being used to purchase the annuity. Your adviser will have confirmed this figure with your provider. The size of your pot directly determines how much income each option can generate.
Your current age and your partner's (if joint life). Joint Life 100% means full income continues to the survivor. Joint Life 50% means half continues. Single Life pays one person and stops on death.
How much your income grows each year. A 3% escalation means income rises by 3% annually. Higher escalation gives better inflation protection but a lower starting income — the projection table shows this growth over time.
Up to 25% of your pension can usually be taken as a tax-free lump sum. Taking more TFC means a lower ongoing income. The comparison shows the long-term trade-off between a lump sum today and higher income over time.
Some providers offer higher income to clients with certain health conditions — called enhanced annuities. Even common conditions like high blood pressure or diabetes can improve the rate. Your adviser will confirm if this applies.
Each option is a different annuity arrangement — varying levels of TFC, different providers, or escalation rates. Options A and B are always shown. C and D are optional extras your adviser may include for further comparison.
How far ahead the tool models your income — typically to age 100–110. This ensures the crossover analysis and cumulative charts capture the full long-term picture, including any point where options change in relative value.
What each section of your comparison report shows
Shows the starting annual income, lump sum taken, and combined first-year benefit for each option. This is a snapshot of immediate value — useful for a quick side-by-side comparison before looking at the longer-term picture.
Shows the age at which one option's cumulative total overtakes another's. An option with more TFC starts ahead, but a higher-income option will eventually catch up. The crossover age is how long you need to live for that to happen.
Shows each option's yearly income growing over time at the escalation rate. Options starting with lower TFC will have higher income lines from the outset. The gap between lines widens over time due to compound escalation.
Shows the running total of all payments received (income + lump sum). Where lines cross is the crossover point. The further you live beyond a crossover, the more the higher-income option leads in total receipts.
The complete year-by-year breakdown from your starting age to the projection end age. Three views are available on screen: Income (annual income each year), Cumulative (running total to date), and Both (side by side). The Best column shows which option holds the cumulative lead in each year — this shifts over time as higher-income options overtake those with more TFC.