What is an inflation-linked annuity?
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In short: An annuity where income rises each year with inflation (RPI, CPI or a fixed percentage). Starting income is lower than a level annuity but purchasing power is protected long term.
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Level annuities pay more today; escalating annuities protect against rising living costs.
Some policies cap annual increases.
Compare quotes for both shapes via open market option.
Primary source: gov.uk/tax-on-your-private-pension/what-you-can-do-with-your-private-pension-pot
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