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Annuity rates depend on a number of factors, including market conditions, life expectancy and the choices you make to shape your annuity. The only way to guarantee that you get the maximum income from your pension pot is to get quotes from the whole annuity market.
How are annuity rates calculated?
When you hand over your pension pot to a provider, they usually invest that money in long-term government bonds, typically a 15 year gilt. The return they can offer you depends on the interest rate, or yield, on that bond.
Life expectancy is also an important factor. As people live longer, providers expect to pay more out, therefore lowering the income that retirees can get.