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Longevity Risk Annuity Insight - UK

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Chelsea Steinmann
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Using the Longevity Risk Insight (Annuity Insight) in AdviserGo

This guide explains how to use the Longevity Risk Insight, also known as the Annuity Insight, in AdviserGo. The insight helps you explore how annuitizing some or all of a client’s money purchase pensions may affect long-term outcomes—specifically cash flow, assets, and legacy.

Plan Setup (Example Used in This Guide)

In this example plan:

  • The plan is for Andrea and Andrew.
  • There are two uncrystallised money purchase pensions (one for each person).
  • Andrea also has:
    • A final salary pension
    • A state pension
  • The plan includes a retirement income goal of £35,000 per year.
  • A property is included for net worth and estate value purposes (this does not affect the annuity calculation directly).

The plan is currently affordable, and the insight is used to test how annuitization would change outcomes.

What the Annuity Insight Does

The Annuity Insight is designed to show how annuitizing part or all of a client’s money purchase pensions can affect:

  • Long-term cash flow
  • Future asset values
  • Estimated estate value / legacy outcomes

Key points:

  • In a joint plan, the insight produces a joint life annuity.
  • In a single-person plan, it produces a single life annuity.
  • The annuity created in the insight is not capital protected.
  • Annuitization occurs at the plan’s retirement event (in this example, age 60).

Annuity Rate Methods

The insight supports two calculation methods:

1) Assumed Interest Rate (Default)

The insight defaults to the plan’s annuity assumed interest rate, found in Plan Settings.
This assumed rate is calculated behind the scenes and is influenced by factors including the client’s age.

2) Specified Interest Rate

You can override the default and use a specified annuity rate instead.

A specified rate is a straightforward conversion. For example:

  • Annuitize £200,000 at a 3% specified rate
  • Resulting annuity income = £6,000 per year

Accessing the Longevity Risk / Annuity Insight

To open the insight:

  1. Select Insights
  2. Choose Longevity Risk (Annuity) Insight

Selecting Who the Annuity Is Purchased For

At the top of the insight, choose Purchase annuity for:

  • Andrea, or
  • Andrew

The values shown in the insight represent the total money purchase pension available for the selected person. If the person has multiple money purchase pensions, the totals include all of them.

Choosing the Calculation Method and Annuity Rate

Within the insight:

  1. Select the Calculation Method
    • Assumed Interest Rate (default), or
    • Specified Interest Rate
  2. If using a specified rate, enter the rate (e.g., 3%)

Choosing How Much to Annuitize

Use the slider to select the percentage of the selected person’s total money purchase pensions to annuitize.

  • You can annuitize from 1% up to 100%
  • The amounts shown reflect the pension value at the start of the retirement year
  • Values are based on the growth assumptions and asset allocations used by the selected plan

Example:

  • Selecting 50% may show a value such as £250,000 being annuitized (depending on plan values at retirement)

Model Portfolios and Asset Allocation (If Available)

If model portfolios are available at the subscription level, the insight includes an Asset Allocation slider.

Important notes:

  • The insight does not use the pension’s existing asset allocation.
    You must select an allocation within the insight.
  • If no allocation is selected, the insight defaults to the lowest risk model portfolio.

If model portfolios are not available, the asset allocation section will be unavailable (greyed out), and the insight will rely on the entered growth rate only.

Market Conditions Slider (If Available)

If available, the Market Conditions slider allows you to shift the expected return of the selected portfolio:

  • Moving the slider adjusts returns relative to the portfolio’s expected average outcome
  • This helps explore more optimistic or more cautious market scenarios

Viewing Results

After you click Get Started, the insight displays key results including:

Estimated Annuity Income

The projected annual annuity income beginning at the retirement event.

Estimated Secure Income

Total income at retirement including:

  • The estimated annuity income
  • Any state pension and final salary pension income
  • This may also include secure income for the second person if it is in payment at that time

Estimated Estate Value

The total estimated value of the selected person’s estate at the plan’s planned legacy point (as defined in the plan’s legacy settings).

Chart Views and Year View

The insight shows the Cash Flow chart by default, but other charts are available. You can also switch between:

  • Detailed and Simple chart views
  • Year View, to inspect what is happening in specific years

In Year View → Pensions, you can confirm:

  • The portion being annuitized (e.g., 50%)
  • The annuity rate used (e.g., 3% specified)
  • The resulting annuity income created from the annuitized amount

Comparing to the Base Plan

You can use Compare Plans to compare the insight results against the base plan. This helps you visually review:

  • When the annuity income begins
  • How the plan’s asset position changes
  • Differences in cash flow and legacy outcomes

To exit comparison mode, return to the standard chart view (for example, select Simulation Chart to view a single chart again).

Testing Longevity Scenarios: “Live Longer”

Within the insight, you can extend the mortality age by up to 10 years using the Live Longer slider.

This helps assess the advantages and disadvantages of purchasing an annuity when the client lives longer than initially modeled.

After adjusting longevity:

  1. Select Recalculate
  2. Review how outcomes change

Notes:

  • Estimated annuity income and estimated secure income typically remain the same
  • The most noticeable change may be in estimated estate value and longer-term affordability

Inline Help Resources

Where you see a question mark or dotted help icon, you can select it to open inline help. This may include:

  • Explanations of each field
  • Links to related articles
  • Additional videos and guidance

Generating a What-If Plan

Once you’ve run the insight, you can generate a What-If plan from the results. This creates a new scenario based on the insight output that you can then edit further.

If Model Portfolios Are Not Available

If model portfolios are not enabled at the subscription level:

  • You will only be able to model using the entered growth rate
  • The asset allocation and market conditions sliders will not be available

Need Help? Request Support

If you need assistance with a plan:

  1. Click the plan name
  2. Select Request Support

This will send a support request to Voyant Support.

Summary

The Longevity Risk (Annuity) Insight helps you explore how annuitizing money purchase pensions impacts:

  • Retirement income security
  • Cash flow sustainability
  • Future asset values
  • Legacy outcomes

It also supports comparisons against the base plan, longevity stress testing, and converting results into a What-If plan for further refinement.

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