Re: What's it worth?
The more you "add on" to an annuity/pension, the more expensive it becomes, therefore you'll get a smaller pension initially.
You can add on spouse's pension, with or without overlap and dependant's pension. If you choose to purchase a joint life annuity, in the event of your death if your spouse is still alive the provider will continue to pay an income to your spouse for the remainder of his/her lifetime. You can decide what proportion of your income will continue to be paid (50%, 67% or 100%). Choosing this option will ensure your spouse is protected in the event of your death. You may choose to have this benefit paid with overlap (in the event of your death the provider will immediately begin paying the income to your spouse) or without overlap (the provider will only pay the income to your spouse on the later of your death or the end of the guaranteed payment period).
You can decide if the payment should inflate every year at a certain percentage, usually 3%, 5% or CPI. Choosing this option will mean your income will increase each year. This helps to protect your income from the effect of inflation.
And you can have a gurantee period - usually 5 or 10 years. This means that, if you purchase this option and you die before your chosen period is over, the Life Office will continue to pay an income, for example, to your spouse or dependants. Should you not die during this period the Life Office will continue to pay you your income for the rest of your life.
The level of income you receive will depend on annuity rates at the time of your annuity purchase. An annuity rate is the rate at which the Life Office will guarantee your income. It can change on a daily basis depending upon long term interest rates amongst other factors. In general terms, if long term interest rates rise, annuity rates will rise and vice versa.
The annuity rate will also vary depending on your age & sex.