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.

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