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Don & Gillian’s Case Study – Invested Annuity

Don and Gillian are a married couple, both aged 57, with a fund size of £100,000 in Don’s name. After advice, their best option is to buy an Invested Annuity with 50% Spouse Benefit. How does their income differ with and without taking the maximum tax-free cash sum of £25,000? *

Fund Size Tax Free Cash Annual Income
£100,000 No £5,607
£75,000 25% £4205

* Based on £100k and taking the 25% Tax Free Cash of £25,000. With a 50% spouses benefit for a 57 year old spouse.