Annuities – a pension income for life

What is an annuity?

When you retire, some or all of your pension fund can be used to purchase a lifetime retirement pension which is also called an annuity. The purpose of this pension annuity is to provide an income for the rest of your life An annuity suits those who have a low appetite for risk and demand certainty of income in retirement.

Our Strengths in Annuities

  • Only the State pays more pensions than Irish Life. In 2019 we paid out over €228M to over 42,000 pensioners.
  • Our annuity administration service is highly regarded by customers and pension professionals.
  • Our solvency ratio is 159% at December 2021. Further information about Irish Life's financial strength can be found in our Solvency and Financial Condition Report

Source: Irish Life

Can my income increase while in payment?

Fixed Increases

Under this option the regular income for life is fixed from the outset (either flat or fixed increases apply e.g. 3%p.a.).

  • Advantage: You know exactly the amount of income you are going to receive for the rest of your life.
  • Disadvantage: It isn’t inflation-proof and offers no protection against the effects of higher than expected inflation. As time goes by, its purchasing power may diminish, if inflation exceeds any increase.
Inflation Linked Increases

The income from this type of annuity escalates in the course of payment as Consumer Price Index (CPI) varies. The rate of escalation is usually capped at a maximum rate e.g. CPI max 5% p.a.

  • Advantage: The purchasing power of your income is somewhat protected against the effects of inflation.
  • Disadvantage: Choosing escalation on you income will impact on the initial amount of pension you can expect from your fund. The amount would be less than if you choose a pension with no escalation.

 Additional Options

The following options can be added to any of the above mentioned annuities, at an extra cost:

Dependants' Pension

You can choose for an income amount to continue to be paid to your spouse/civil partner or other financial dependants following your death.

Minimum Payment Period

You can choose to have your annuity paid for a minimum period, for example, five or ten years. If you should die during this period your annuity will continue to be paid to your dependants until the minimum period has expired. The annuity purchased will be lower than an annuity with no minimum payment period.


All annuities are subject to income tax in the same way as any other income you receive. They may also be subject to Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) deductions.

Annuity calculator – How do I get an annuity quote?

We offer a unique online annuity calculator which allows you to run quotes for your pension annuity.

For more information please contact your company pension advisor, your broker, or Irish Life Sales Support on (01) 704 2000 or email Alternatively download our guide - All About Annuities