Annuities are a financial products offered by insurance companies / annuity providers to over 55 year olds who are looking to retire. In exchange for the customer’s private pension, the insurance provider then pays out a guaranteed income to the customer each year for the rest of their life (or for a fixed set of years), based on the agreed annuity rate.
Types of Annuities
This works by anticipating a growth rate of the investment fund at the outset of the plan. It offers you a retirement income based on this. During the plan this growth will be reviewed and a bonus rate calculated. If it achieves its growth rate, the income you draw as a regular payment may go up – but if it falls short the income can go down.
For more information on invested annuities click here.
For many people, a Lifetime Annuity will give the best outcome. It’s a regular lifelong income that’s fixed at the outset, based on the size of your pension fund and your personal circumstances like age and medical history.
For more information on lifetime annuities click here.
Fixed Term Annuities
Our Fixed Term Annuity shares the low risk of a Lifetime Annuity and adds some other choices. It’s a set amount, but you choose how long to receive it for. When the term ends, you’re free to use the Guaranteed Maturity Amount – the size of your pension fund at the end of the term – to take up another option.*
For more information on fixed term annuities click here.
A guarantee period can be added to an annuity as a way of continuing the Pension Income for loved ones should you pass away early in the plan. They can be anything from 1 to 30 years and whilst they can affect your level of income it is not always by as much as you might imagine. So it’s always worth comparing quotes and discussing fully with your Independent Financial Adviser.
What is impairment?
Conditions like heart disease and cancer are tragic. If you have suﬀered from one, providers will often increase your income to make up for your reduced life expectancy. So make sure you tell us about your medical history – over 1,000 conditions count.
What are Enhanced Annuities?
Smoker? Drinker? Few extra pounds? These factors may aﬀect your life expectancy – and because of it your pension income could increase. This is where accurate information can mean a signiﬁcant increase in the level of payments made by the provider. So be honest about your indulgences – they add up!