For the first scenario , I used the
Money Helper website , which has an excellent annuity comparison engine . I pretended I was 65 years old , then pretended a bit more that I had £ 500,000 in my pension pot and was ready to buy a standardissue , single-income lifetime annuity . I did confess in the short questionnaire to my past heart troubles , which may well have given me a better rate than someone in perfectly good nick . The calculator then coughed up a range of quotes , offering me £ 2,049 per month for as long as I remain alive . Actuarially , that ’ s until I ’ m 89 , so that ’ s 24 years of payments , keeping up with RPI , of about £ 24,590 each year . By my reckoning , that ’ s £ 590,000 of income for a £ 500,000 investment . They clearly believe I ’ m not going to reach 89 ! Next , I turned to my trusty pensions drawdown calculator and entered the very same numbers : retiring now at 65 with £ 500,000 , assuming inflation averages 2.5 %. The graph shows three lines dependent on the return I get .
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