The value of a guaranteed annual payment in the form of a pension or annuity increases as interest rates fall.
The following chart shows the cost to purchase an annuity (equivalent to a pension) based on UK data.
For example in 2008 it would have taken £707,000 to purchase an annuity providing £50,000 per annum income for a single person, while in 2015 it would require £908,000 to purchase the same £50,000 annual income. This is an increase of around 30% from 2008 to 1015.
There would be a similar increase in the value of a fixed income stream in the form of a pension in Australia.
This tab updated on 3 June 2015