Are There Annuities in New Zealand? Guaranteed Retirement Income Options in 2026

Can you still buy an annuity in NZ in 2026? We explain why the traditional market closed, the annuity-style products that remain, and how to build a guaranteed income floor for retirement.

A common question as people approach 65 is whether they can hand over a lump sum and receive a guaranteed income for the rest of their life. Overseas, that product is an annuity. In New Zealand the traditional annuity market has effectively closed, so the honest answer is "not in the form you might expect". A few annuity-style products remain, and there are several ways to build your own guaranteed income, starting with NZ Super.

TL;DR: You generally cannot buy a traditional lifetime annuity in New Zealand in 2026. The main annuity-style product still available is Lifetime Retirement Income's managed-income fund, which pays a percentage of your starting balance for life (about 5.00% a year from age 65) ³. NZ Super already acts as a guaranteed, inflation-indexed income floor of roughly $27,998 a year after tax for a single person ¹.

Can you actually buy an annuity in New Zealand in 2026?

An annuity is a contract where you pay an insurer a lump sum and, in return, they pay you a set income, usually for the rest of your life. It removes the risk of outliving your money, because the payments continue no matter how long you live.

In New Zealand, traditional lifetime annuities are no longer sold by mainstream providers. There is no major NZ insurer offering a standard "give us your savings, we guarantee an income for life" product the way you might find in the United Kingdom or Australia. So if you are looking for a classic annuity, you will not find one on the open market here.

What does exist is a small number of annuity-style products. The best known is the Lifetime Retirement Income Fund, run by Lifetime Asset Management, which turns a lump sum into a regular income designed to last for life ³. It is structured as a managed fund rather than an insurance contract, and the distinction matters, as we explain below. There are also simpler do-it-yourself approaches, such as term deposit ladders and structured KiwiSaver drawdowns, that aim to produce a similar steady income without an annuity at all.

The practical takeaway is that the goal, a reliable income you cannot outlive, is still achievable here. It is just assembled differently from a traditional annuity.

Why did the traditional NZ annuity market disappear?

Annuities used to be sold in New Zealand, but the market thinned out over the 1990s and 2000s and never recovered. A few reasons sit behind that.

The first is NZ Super itself. The Retirement Commission has described NZ Super as the country's de-facto guaranteed lifetime annuity: a universal, inflation-indexed income that almost everyone receives from age 65, calculated relative to the average wage ⁷. The couple rate is set at 66% of the net average ordinary-time wage, the single-living-alone rate at 65% of the married rate, and the single-sharing rate at 60% ⁷. When most retirees already have a state-provided income for life, demand for a private one is much smaller.

The second is the tax and regulatory treatment. Annuities became unattractive to sell once the tax rules around them changed, and the small size of the New Zealand market made it hard for providers to price longevity risk profitably. Pooling that risk needs scale, and the numbers here were never large.

The result is a thin market. Rather than a regulatory gap to worry about, it reflects the fact that New Zealand built a strong universal pension instead. That is also why the conversation here is usually less "which annuity should I buy" and more "how do I top up NZ Super to the level I want".

What is the closest thing to a lifetime annuity available here now?

The nearest equivalent to a lifetime annuity in New Zealand is the Lifetime Retirement Income Fund. It is worth understanding how it works, and where it differs from a true annuity.

You invest a lump sum (the minimum initial investment is $25,000), and from age 65 you can start drawing a regular income ⁶. The income is set as a percentage of your starting investment, fixed by the age your payments begin. Starting at age 65, the net income rate is 5.00%, so $100,000 would pay about $5,000 a year, roughly $192 net per fortnight, intended to continue for life ³. The rate rises the later you start: about 4.50% at age 60, up to 7.50% at age 90 ³.

Here is the important distinction. With a true annuity, the income is contractually guaranteed by an insurer. With Lifetime, your money stays invested in a managed fund (with a long-term gross target return of about 5.50% a year, which is not guaranteed) ⁶. What Lifetime guarantees is that the income payments are designed to continue for life even if your account balance runs down. So the income stream has longevity protection, but the underlying returns and your remaining capital can still go up and down with markets.

The fees reflect the extra service involved. Lifetime discloses an annual fee of about 1.35% a year (1.00% investment management plus 0.35% for the income review) ⁴; on Sorted's Smart Investor register the total combined fee is shown as 1.28% a year on a $30,000 balance ⁵. That is higher than a low-cost index fund, which is the trade-off for the income-for-life structure and the annual review that comes with it.

How does a guaranteed-income product compare with leaving KiwiSaver invested?

This is the core decision. Broadly there are three ways to turn a lump sum into retirement income in New Zealand, and each balances certainty against flexibility differently.

Three ways to turn a lump sum into retirement income in NZ

Figure (described): a comparison table of three ways to turn a lump sum into retirement income in NZ — a Lifetime-style managed-income product, a term deposit ladder, and a DIY KiwiSaver drawdown — scored across income certainty, inflation protection, flexibility, capital access on death, and fees. Sources: provider PDS documents and the Retirement Commission ³⁴⁵⁷.

The trade-off runs in one direction. A managed-income product buys you certainty that payments are structured to last for life, at the cost of higher fees and less flexibility. A DIY KiwiSaver drawdown keeps full control and lower fees, but the responsibility for making the money last sits with you. A term deposit ladder sits in between for the cash portion of a plan.

Returns are not guaranteed. The value of investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future performance. Our guides on KiwiSaver drawdown options and the safe withdrawal rate in NZ go deeper on the DIY approach.

What are the costs, trade-offs and inflation risks of locking in income?

Certainty has a price, and it is worth naming the downsides plainly before anyone locks money into an income product.

The clearest cost is fees. At around 1.28% to 1.35% a year ⁴⁵, an annuity-style managed fund costs noticeably more than a plain index fund. Over a long retirement, a higher fee compounds into a meaningful amount, which is one reason these products suit some people and not others.

The second is inflation. Because the income is set as a percentage of your starting capital, the dollar amount does not automatically rise with the cost of living. NZ Super does adjust each year, but a fixed-percentage private income may slowly buy less over a 25 to 30 year retirement. That is a real risk for anyone relying heavily on a fixed income stream.

The third is flexibility. Structured income products have rules about how and when you can change things. If your circumstances shift, for example a health event or a large one-off cost, you may have less room to adjust than you would with money sitting in a flexible KiwiSaver account.

Against those costs sits the benefit: the discipline and reassurance of an income that is designed not to run out, and an annual review that keeps it on track. Whether that trade is worth it depends entirely on your other income, your health, and how much certainty you value. This is general information, not a recommendation either way.

Who is an annuity-style product actually right for in NZ?

There is no single answer, but a few situations come up where people give annuity-style income a closer look.

• People worried about outliving their money. If the main fear is spending down savings too fast, a product designed to pay for life can take that decision off your plate.
• People who do not want to manage investments themselves. A DIY drawdown means choosing how much to sell and when. Some people would rather hand that over and accept the fee.
• People with limited other guaranteed income. Someone whose NZ Super covers only part of their spending may value adding a second income-for-life layer.
• People who value certainty over flexibility. If the steadiness of a known payment matters more than keeping full control of the capital, the structure can fit.

Equally, it is not right for everyone. People who want low fees, full flexibility, or to leave the largest possible inheritance may prefer a self-managed drawdown. Those with significant assets and a high tolerance for market movement may not need the longevity protection at all. The Massey Retirement Expenditure Guidelines give a sense of scale here: a single person in a metro area is estimated to need roughly $42,966 a year for a modest "no-frills" budget and about $60,480 a year for a "comfortable/choices" budget, implying a saved lump sum of roughly $355,000 to $717,000 in today's dollars to top up NZ Super ⁸.

Factors that influence whether this kind of product suits someone include their other income, health and life expectancy, attitude to risk, fees, and estate plans. Personalised advice works through what fits your situation; this article cannot.

How do you build your own 'income floor' if you can't buy an annuity?

You do not need an annuity to create a guaranteed income floor. Most NZ retirement plans build one in layers, from the most certain income to the least.

1. Start with NZ Super. This is your guaranteed, inflation-indexed base. A single person living alone receives about $538.42 a week, roughly $27,998 a year after tax ¹. A couple where both qualify receive about $828.34 each per fortnight, $1,656.68 combined ². Check your eligibility and timing in our guide to NZ Super rates and eligibility.

2. Cover essential spending first. Add up your non-negotiable costs, rates, power, food, insurance, and work out the gap between those and NZ Super. That gap is what your savings need to fill reliably.

3. Decide how to fill the gap. Options include a Lifetime-style income product for part of it, a term deposit ladder for near-term spending, and a KiwiSaver drawdown for the rest. Many people blend all three rather than choosing one.

4. Keep a growth layer for the long run. Over a 25 to 30 year retirement, inflation is the quiet risk. Holding some money in growth assets, often within KiwiSaver, helps the plan keep pace, accepting that this part can rise and fall in value.

The point of an income floor is that your essential spending is covered by income you can count on, so market ups and downs only affect the discretionary extras. Our guide to KiwiSaver decumulation and drawdown covers the mechanics of turning a balance into a regular income.

KiwiSaver is a long-term savings scheme. Government contributions, contribution rates, withdrawal rules and tax (PIR) settings are set by the Government and can change. Figures are correct as at 20 January 2026. Check current rules at ird.govt.nz, kiwisaver.govt.nz and sorted.org.nz, and the relevant scheme's Product Disclosure Statement.

Frequently asked questions

Can I buy a lifetime annuity in New Zealand in 2026? Not in the traditional sense. Mainstream NZ insurers no longer sell standard lifetime annuities. The closest available product is the Lifetime Retirement Income Fund, a managed fund designed to pay an income for life, which is structured differently from a true annuity. NZ Super also acts as a guaranteed, inflation-indexed income for life that almost everyone receives from age 65 ⁷.

How much income does a Lifetime annuity-style product pay? The income is set as a percentage of your starting investment, based on the age you begin. Starting at age 65 the net income rate is about 5.00%, so $100,000 would pay roughly $5,000 a year, about $192 net per fortnight, designed to continue for life ³. The rate rises the later you start, up to about 7.50% at age 90 ³. The minimum initial investment is $25,000 ⁶.

Is the income from these products guaranteed? The income payments are designed to continue for life, which is the longevity protection. But the underlying money stays invested in a managed fund, so the returns and your remaining capital are not guaranteed and can go up and down. This differs from a traditional annuity, where an insurer contractually guarantees the income itself ³⁶.

What are the fees on an annuity-style fund in NZ? Lifetime discloses an annual fee of about 1.35% a year, made up of 1.00% investment management and 0.35% for the income review ⁴. Sorted's Smart Investor register shows a total combined fee of about 1.28% a year on a $30,000 balance ⁵. That is higher than a low-cost index fund, which is the trade-off for the income structure and ongoing review.

Is an annuity-style product better than just drawing down my KiwiSaver? Neither is better in general; they suit different people. A managed-income product offers certainty that payments are structured to last for life, at higher fees and lower flexibility. A KiwiSaver drawdown keeps control and lower fees, but you carry the responsibility for making it last. Many plans blend both. The right mix depends on your circumstances, which is what personalised advice works through.

Does NZ Super count as a guaranteed income? Yes. The Retirement Commission describes NZ Super as New Zealand's de-facto guaranteed lifetime annuity: a universal, inflation-indexed income calculated relative to the average wage ⁷. For a single person living alone it pays about $27,998 a year after tax ¹. For most people it is the foundation of any income floor, with savings topping it up.

This article is general information only and is not personalised financial advice. It does not take into account your particular financial situation, goals or needs. Before acting, consider whether it's right for you and seek advice tailored to your circumstances. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 20 January 2026.