An Annuity is a guaranteed income for life.

It is a single premium insurance policy issued by a life assurance company where, in return for a lump sum payment now, the life company guarantees to pay a specified level of income for the remainder of the life of the individual insured by the policy.(spouses or dependants can be included).

Annuities can be index linked and provide no investment risk worries.

Annuities also carry a corresponding risk of the loss of a substantial amount of money if an individual dies shortly after purchasing an annuity.

Life Companies generally sell 2 types of annuities.

  • Compulsory Purchase Annuity (CPA)-an annuity that can be bought under the terms of a pension arrangement.

The income from a CPA is liable to income tax

  • Purchase life Annuity (LPA)- an annuity which an individual decides to buy voluntarily out of their own personal funds.

Part of the income from a PLA is treated as a return of the individuals capital invested and is tax free.

The balance of the annuity payment over the capital content is liable to income tax.


Please note all annuity payments are subject to the Universal Social Charge (USC), including the capital element of a PLA





The level of annuity rate a life company will offer an individual will be influenced by the following factors

  • The individuals age
  • The individuals health
  • The type of annuity i.e. including spouse or dependant, index linked
  • Interest rates ruling at that particular time
  • Whether the Annuity is a CPA or LPA- life companies usually offer slightly lower annuity rates for a PLA on the basis that someone who voluntarily decides to purchase an annuity out of their own funds is very likely to have an above average expectation of life.
  • The Size of the purchase price- Expenses in setting up and operating an annuity are largely fixed, larger purchase prices tend to get slightly higher annuity rates.


















Safe Life and Pensions Ltd

Registered in Ireland, Registration Number 508071

Address 9 Firgrove Park, Bishopstown Cork City

Safe Life and Pensions Ltd is regulated by the Central Bank of Ireland