Increasing Value of Benefit

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.

Annuity Rate Chart

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.


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This tab updated on 3 June 2015