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You asked: What is the difference between inflation protected and escalating annuities?

The income from annuities that are protected against inflation will increase every year in line with the rate of inflation measured by the UK Retail Prices Index. If the RPI goes down (deflation), your income will remain level. It will start to increase again once the RPI has risen above the point it was at when your income became level. With an escalating annuity, your income will increase by a set amount, usually 3% or 5% each year.

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