The issue to consider here is whether or not you try to protect the value of your income by contractual annual increases. Such an agreement would be at the expense of a lower regular income from day one.

This is a difficult decision with no obvious right answer at the time you have to make it. For example, if you chose a higher immediate income with no annual increase and lived for only three years, it would have been the best decision. But even at today’s low inflation rates of around 3.5%, an income of £10k pa would be equivalent to less than £5k in 30 years time.

This implies that you ought to think the unthinkable – using all factors available (such as current health, family history, etc) to guess how long you and your spouse will live. Alongside this, you will want to take account of other investments, assets and sources of income and whether or not they will continue to be available, whether or not they will grow or diminish and whether or not they will support you and your spouse (last survivor) for life.

None of the schemes available provide for your income to increase with inflation (or RPI), but it is possible to invest a lump sum in a type of annuity that does.