Escalation and deferral calculator

Timing can be key when determining whether or not to commit to annuity purchase. Equally important in considering the suitability of a lifetime annuity is to consider the effects of inflation on any future retirement income.

How the calculator works

Input screen -  here you can input annual values for level and escalating payments and, if you choose, values for deferring annuity purchase for a year. You will also be asked to choose an assumed rate of escalation

Please note that no assumption is made on investment growth (or decline) or changes in annuity rates when the deferral calculation is made.

The results will show you:

Chart 1  - level versus escalating annual payments and the 'cross-over point' for escalating payments

Chart 2  - the cumulative total annuity payments made year by year for both level and escalating payments

Chart 3 -  (if input made) the cumulative level payments after one year's deferral

Chart 4 -  (if input made) the cumulative escalating payments after one year's deferral

Use the calculator now