An RPI-linked annuity is another type of increasing annuity that is directly linked to the retail prices index of inflation. This guarantees that your level of retirement income will increase directly in line with inflation.
However, your income is not guaranteed to rise each year because it depends on the rate of inflation linked to the RPI index. If RPI didn’t increase, neither would your income and if it fell then so would your income.
It is important to realistically consider if you would live long enough to benefit from an RPI-linked annuity.
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