Skip to the content

Annuities Pension Drawdown Fixed Term Plans


A lifetime annuity is a policy that when purchased converts a capital lump sum into a series of future income payments for as long as the policyholder is alive.

Most annuities pay a guaranteed income for life and have the following characteristics:

  • They pay an income for the rest of the policyholder’s life, no matter how long that is
  • They are based on the principle of ‘mortality cross subsidy’
  • Enhanced rates are available for those in poor health
  • On death, payments stop unless a joint life annuity, a guaranteed payment period or value protection option has been selected
  • Payments can remain level or increase each year

In order to meet the income for life promise, annuities are based on the concept of mortality cross subsidy.

Mortality cross subsidy is unique to annuities and clearly favours those in good health who may live longer than expected at the expense of those who die early. To overcome this problem some insurance companies provided enhanced annuities. Enhanced annuities pay a higher income for those who have a medical condition that may reduce their normal life expectancy.

The person who purchases an annuity is called the annuitant, and the amount of income they receive depends on the following factors:

  • The amount of money invested
  • Age of policyholder and partner if a joint life annuity
  • Anticipated life expectancy (taking health and lifestyle conditions into account)
  • The underlying interest rate
  • Options selected


Annuity News

I write regularly about annuity rates and trends. This page has my latest annuity updates and I update it at regular intervals.

The best way to follow annuity rates is to follow my annuity charts

Latest Blog Posts

William Burrows

Offices in London, Northampton and Cardiff

Call: 07730 435 657


William Burrows / Retirement Intelligence Ltd
International House
24 Holborn Viaduct
Better Retirement
400 Pavilion Drive
NN4 7PA 

If you need help or advice - Contact us

As one of the most respected specialist retirement advisers, William Burrows and Better Retirement will be pleased to help you make the right decisions at any stage of your retirement journey.

Call or email now for a free and without commitment chat.

This website is run by William Burrows and publishes generic information on annuities, drawdown and other related retirement income matters. Any information you use is at your own risk and does not constitute financial advice.

If you require financial advice you will be advised by Better Retirement where William Burrows is authorised to give investment advice. Better Retirement Group Ltd is authorised and regulated by the Financial Conduct Authority, reference number 153420.