Annuitant Explained: 2025 Guide for Australians

If you’re planning for retirement in Australia, the term annuitant is likely to pop up in your research. But what does it actually mean, and why is it especially relevant in 2025? With the Australian government focusing on retirement income reforms and superannuation fund innovation, annuities and their holders—annuitants—are taking centre stage in the national conversation about financial security after work.

What Is an Annuitant?

An annuitant is the person who receives payments from an annuity contract. In simple terms, if you buy an annuity—an insurance or investment product designed to provide a steady income stream, usually during retirement—you’re the annuitant. The annuity itself can be purchased with superannuation savings or other funds, and it pays out either for a set period or for the rest of your life.

• Lifetime annuities: Pay a guaranteed income for life.

• Term annuities: Pay income for a fixed period (for example, 10 or 20 years).

• Indexed annuities: Payments rise with inflation or a chosen benchmark.

In all these cases, the annuitant is the individual whose life and circumstances determine the payments.

2025 Updates: Annuities and Retirement Policy

In 2025, the Australian government has continued to roll out the Retirement Income Covenant, encouraging super funds to offer more comprehensive retirement income solutions—including annuities. Recent policy tweaks aim to make annuities more attractive and flexible for retirees, particularly as more Australians reach retirement age with larger super balances.

Key 2025 policy highlights:

• Greater product innovation: Super funds now offer blended products that combine account-based pensions and annuities, giving annuitants more control and security.

• Tax incentives: Certain annuities purchased with superannuation money continue to offer concessional tax treatment, especially if structured to meet new Age Pension asset test rules.

• Centrelink and Age Pension: Lifetime annuities can help reduce assessable assets for the Age Pension, improving eligibility for some retirees.

As a result, annuitants in 2025 have more choice and greater certainty about income in retirement. This is especially important given ongoing market volatility and longer life expectancies.

Annuitant in Practice: Real-World Scenarios

Let’s look at how being an annuitant plays out in real life:

• Margaret, 67, retires with $450,000 in super. She uses $200,000 to buy a lifetime annuity that pays her $10,000 per year, indexed to inflation. As the annuitant, she’s guaranteed this income no matter how long she lives, while the rest of her super remains invested in an account-based pension.

• John and Lisa, both 72, purchase a joint annuity. As joint annuitants, the income continues until both have passed away, providing financial certainty for the surviving spouse.

In both scenarios, the status of ‘annuitant’ brings with it both security and a set of obligations. For example, annuitants may have limited access to their capital, and payments are governed by the terms of the annuity contract.

Should You Become an Annuitant?

With interest rates stabilising in 2025 and longevity risk—outliving your savings—becoming a bigger concern, annuities are regaining popularity among Australians wanting peace of mind. However, annuities aren’t for everyone. Consider these factors:

• Desire for guaranteed income versus flexibility

• Health status and life expectancy

• Impact on Age Pension and other benefits

• Fees, inflation protection, and product features

Compare annuities carefully and weigh them as part of a broader retirement strategy, not in isolation.

Conclusion

Being an annuitant in Australia in 2025 comes with more options and flexibility than ever before, thanks to government reforms and industry innovation. Whether you’re seeking to lock in peace of mind or balance risk and reward in retirement, understanding the role of the annuitant is essential to making the right financial moves for your future.