Before now, annuity pricing had been determined by a combination of factors including age, sex and the size of the fund. Lifestyle pricing takes into account where a policyholder lives and their location is also linked to their diet, exercise levels and wealth. By analysing this information, Prudential can estimate more precisely how long someone will live and therefore price their annuity more accurately. The use of postcodes is already used in pricing for other policies like general insurance and Prudential is one of the first companies to launch this approach to annuities pricing.

Lifestyle pricing will be available to customers who transfer their pension fund to Prudential from another provider using the Open Market Option or OMO, please contact us for more details.

It is estimated that annuitants could be up to five per cent better off over their lifetime than with a traditionally priced annuity. This means that a typical customer with a £100,000 fund could be up to £5,000 better off.