We use essential cookies to make our website work properly when you visit us. We’d also like your consent to set other non-essential cookies to help us improve our website and tailor the marketing you see.
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.