Just reading my annual pension statement. Appreciate I am lucky to have one.
It gives a figure which I could expect to have annually if I keep saving and retire at 60 as an annuity. When I look at how this is calculated it's based on a statutory definition from the financial reporting counsel.
The problem is the amount it says I could have in an annuity, is less than the actual amount ie if I divide the amount it says I could have as an annual annuity by my projected total savings, just drawing down the amount from the total savings, would last until I was well over 100
Ie if I have a projected pot of 250k, it says I can have an annuity if 5k a year. Even if I took the 25k tax free it would last until I was 105 if I just drew down the same amount annually from the pot.
Are these calculations/ annuities a crock of shit? Or have I misunderstood.