What is Investment-Linked Annuity

An annuity provides an income in retirement in exchange for your pension savings. An investment-linked annuity is a financial product where the retirement income changes based on the performance of investments linked to the annuity. This means that if the linked investments change in value, so will your retirement income.

With investment-linked annuities, you choose the starting level of income from a range set by the annuity provider. If the actual rate of growth in the investment is the same as the anticipated growth rate, your annuity income will remain the same. If the actual rate is higher or lower than the anticipated growth rate, your income will rise or fall accordingly.

Related terms
What is an Annuity
What is an Enhanced Annuity (aka impaired annuity)
What is Fixed Term Annuity
What is Joint-Life Annuity
What is a Guarantee Annuity Rate