Annuities Explained The Annuity Postcode Lottery


The Annuity Postcode Lottery

It is estimated that people living in areas such as Glasgow will not live as long as people living as long as those in Surbiton or Chelsea.  The average life expectancy recorded in Glasgow is 70.7 years. This contrasts to places such as Kensington and Chelsea where the life expectancy is much higher, at a rate of 84.3 years according to official Government data. One of the main contributing factors to these figures is diet.

From this data we can clearly see which areas have a higher average life expectancy. Therefore where you live can hugely affect what income you will retire on. Actuaries use this to estimate how long people will live and how much retirement income they should receive. Therefore, the healthier the town, the smaller the annuity income offered to the people living there, as the insurance companies would have to keep paying them for longer.

Mortality Calculator

You can check what the healthiest towns are around and what towns are recorded to be some of the least healthy by typing in your postcode in to a ‘mortality calculator’. This will give you some examples of some of the most healthy towns around and some of the more unhealthy.

Some of the highest ranked life expectancy towns include Brentwood, South Norfolk, Wokingham, Hart, Crawley, Uttlesfield, Horsham, Kilbernie, Bootle, Lochgelly, Queeneborough, Kyle, Sanquhar, Arisaig, Cumnock, Castlederg and Maryport. In contrast to this, some of the lowest ranked shortest lived towns include Hinton St George, Verwood, Lymington, Lyme Regis, Colyton, Church Stretton, Aldegurgh, Brockenhurst, Montacute, Kinbrace.

Current Residency

Current residency can determine the annuity rate you will receive. Due to other factors such as advanced technology and private health care, some people in more affluent areas are predicted to live longer than those from a less affluent area who may not be able to afford such things.

Postcodes can affect annuity income by 5 – 10%. This is hardly surprising with almost 13 years difference in average life expectancy between some of Britain’s towns. It is predicted that long term annuities will be become far less attractive to people with a long life expectancy and a larger pension pot, and that these people will choose to look for other options such as income drawdown. It is likely the more affluent portion of society will be the ones delaying the annuities.


That said, we don’t expect thousands to relocate to Glasgow for a better annuity rate as shopping around can negate this difference. This reinforces the fact that people should shop around for the best deals on the market, and not necessarily take the first deal offered to them by their provider.

Discussing the ‘post-code’ issues with an IFA could be very useful as the professional will be able to advise how your living situation will affect your annuity rate and offer the best options available.

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