Home
Back
Legal and General Annuity Formula:
| From: | To: |
The Legal and General pension annuity provides a guaranteed income for life in exchange for your pension pot. It's a secure way to ensure regular payments throughout retirement, offering financial stability and predictability.
The calculator uses the Legal and General annuity formula:
Where:
Explanation: The annuity rate determines how much annual income you'll receive for each pound in your pension pot. Higher rates mean more income for the same pot size.
Details: Accurate annuity calculation helps retirees plan their retirement income, budget effectively, and make informed decisions about their pension options. It ensures financial security throughout retirement years.
Tips: Enter your total pension pot in GBP and the current annuity rate offered by Legal and General. The annuity rate should be entered as a decimal (e.g., 0.05 for 5%). Both values must be positive numbers.
Q1: What factors affect annuity rates?
A: Annuity rates are influenced by age, health, interest rates, inflation expectations, and market conditions. Older individuals typically get higher rates.
Q2: Are there different types of annuities?
A: Yes, including level annuities (fixed payments), escalating annuities (increasing payments), joint-life annuities (continue for spouse), and impaired life annuities (higher rates for health conditions).
Q3: When should I purchase an annuity?
A: Typically at retirement age, but you can defer purchase. Consider market conditions, your health, and financial needs when deciding timing.
Q4: Can I change my annuity once purchased?
A: Most annuities are irreversible. Some may offer limited flexibility, but generally, once purchased, the terms are fixed for life.
Q5: How does inflation affect annuity payments?
A: Level annuities maintain the same payment, so inflation erodes purchasing power. Escalating annuities increase payments to help combat inflation.