For single payment investments
Your client can invest from £7,500 with a single payment and receive a regular income for life. It’s ideal for clients looking for a product with no investment risk attached. But once bought, an Immediate Life Annuity cannot be changed or cashed in.
Choice of income payments
The same amount each year or increasing annually by a fixed percentage
Income can be guaranteed for a fixed period from the outset, even if your client dies within that time
We’re happy to facilitate an adviser charge, with various options available
Why an Immediate Life Annuity?
Easy to buy
- Your clients can buy this annuity with funds from savings, inheritance, or tax-free cash from a maturing pension scheme.
- Income can be monthly, quarterly, half-yearly or annually
- Income can be fixed or increase each year by a set percentage
- Option to guarantee that when your client dies their estate will receive the value of the money put into the annuity, less any payments that have been made
- The plan may qualify as a purchased life annuity with associated tax benefits
- Clients can guarantee income payments for a fixed period from the outset, so payments are made even if they die in that time
- Option of paying income to a dependant when your client dies
Facts and figures
If the annuity is set up to cover 2 people, both applicants need to be 55 or over and at least one of them must be under 95.
Income is paid for as long as your client lives - and if a dependant’s option is chosen, to that person for as long as they live.
If the plan is being bought from your client’s own funds, the minimum payment is £7,500 after adviser charges. If it’s being purchased by trustees of a will or settlement, the minimum figure is £100,000 after adviser charges. If your client wishes to purchase a plan with a value of £2 million or more after adviser charges, please contact us directly.
There are no extra product charges. All the charges for setting up and running this annuity are taken from the fund and accounted for when we set the income level. If we’re required to re-quote, there’s a charge of £40 per quote.
We’re happy to facilitate an adviser charge. It can be a fixed amount or a percentage of the annuity-purchase amount, with the option to specify a minimum and/or maximum.
2% plus uplift with rebating in 5% steps is allowed. Only available on non-advised sales.
Our Immediate Life Annuity may be taxed differently from pension annuities. HM Revenue and Customs may decide that part of your client’s payment is a return of capital and not subject to tax.
Our Immediate Life Annuity is designed for clients who:
- Are typically aged between 55 and 95
- Want a regular income for life
- Are looking for a product that has no investment risk attached
- Have an amount to invest of at least £7,500 after adviser charges
It’s unlikely to be suitable for:
- Clients who want flexibility in their future income
- Clients who would like the opportunity to change their product in the future
Things to consider:
- Are there tax considerations you should discuss?
- How old are your clients and what is their life expectancy?
- Do your clients realise they can't cash this plan in at any time?
Possible alternatives to the Immediate Life Annuity include:
- Investment bonds
- Other forms of non-pension savings and investments
Key documents and resources
As a global asset manager with far-reaching expertise and extensive capabilities across all major asset classes, we can deliver outcomes that help your clients achieve their financial goals.
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