Level annuity

A level annuity is a type of annuity that pays out the same amount each year for the rest of your life. The main drawback with a level annuity is that your purchasing power becomes reduced as the amount you receive falls in real value as inflation increases.

Level annuities are sometimes known as standard annuities and pay a higher income at the beginning than increasing annuities. However, if you are thinking of investing in a level annuity then you need to think carefully if you could manage on an income that never increases with inflation.

	Mortgage lending in April at highest level for five years The Council of Mortgage Lenders (CML) reports mortgage lending went up by 4.3 per cent in April compared to March and by 22 per cent compared to April 2012.
	FSA launch inquiry into annuity market The Financial Services Authority has launched an inquiry into the annuity market to investigate whether customers are being encouraged to scour the market for the best deal.
	Business confidence improves to highest level for five years A new survey of finance directors by accountants Deloitte shows that business confidence is improving and firms increasingly believe now is a good time to borrow and invest.
	Annuity rates fall by 11.7% in 12 months New research by MGM shows that the decline in annuity rates is continuing and pension savers are being urged to consider all options to find a better return.
	Inflation up to 2.8%, highest level for nine months Inflation inched up to 2.8 per cent in February, its highest level for 9 months as higher oil prices contributed to a rise in the cost of petrol.