Pension Annuity

Easy to buy

• Clients can use funds from all UK registered pension schemes
• No need for a medical - we can quote from a common quote-request form

Great choice

• Clients can choose to receive their income monthly, quarterly, half-yearly or yearly, and it is payable in advance or in arrears
• Income can be at a fixed rate - or, your client can opt for an annual increase at either a fixed percentage or in line with the Retail Prices Index
• Option to pay an income to a surviving dependant when your client dies
• 1-year guarantee period as standard - income payments continue even if the client dies during this time. If they wish, clients can choose a longer period at outset
• Standard value-protection period of 90 days - so if your client dies in this time, we’ll pay a lump sum equivalent to the annuity purchase price less any payments already made. Value protection can be extended either for a specified term or a percentage of the price paid

Extra value

• Sophisticated pricing ensures a personalised quote for every client
• Higher rates if a covered spouse or dependant has a health condition too

Age limits

The minimum age your clients can buy this annuity is 55. It may be possible at a younger age if your client is retiring through ill health or the annuity is being bought for a dependant following the death of a member of a pension scheme.

The maximum age at which we can set up a Pension Annuity from full fund transfers or the Open Market Option is 90.

Term

Income is paid for as long as your client lives - and if a dependant’s option is selected, this will be paid to the dependant for as long as they live. Your client can choose for the income to be paid for a minimum number of years from the outset. Alternatively, they can protect up to 100% of the fund used to buy the annuity so we’ll never pay less than this amount in total.

 

Payment limits

The minimum payment to set up a Pension Annuity is £10,000 after taking any tax-free cash sums and paying adviser charges. There is no maximum amount, but please contact us about any plans valued over £1 million.

 

Product charges

There are no extra product charges. All the charges for setting up and running the annuity are taken from the fund and accounted for when we set the income level.

 

Adviser charges

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. 

 

Commission

For non-advised sales commission is available and rebating is allowed. For any commission enquires please contact acinfo@aviva.com

Our Pension Annuity is designed for clients who:

• Want a regular, guaranteed, lifelong income
• May want to access 25% of their pension fund as tax-free cash
• Would like the option for their income to increase annually, either in line with inflation or at a fixed rate
• Would like the option to provide a guaranteed, lifelong income to their spouse or a dependant after their death
• Could explore the impact of health and lifestyle factors on their life expectancy, or their dependants. For example heart attack, stroke, diabetes or any other serious medical condition

It’s unlikely to be suitable for:

• Clients who want the option to change their level of income as circumstances change
• Anyone relying on medical information that isn’t supported by a doctor
• Clients in a defined-benefits company scheme or who want to carry on paying money into any current pension scheme
• Clients who want greater flexibility over the level of income and are willing to accept the additional risks this may involve

Things to consider:

• You should shop around, in order to get your client the highest income as different providers will offer different rates.
• Does your client want more flexibility than this product can offer?
• How much is their pension fund worth?
• Does their policy have guaranteed annuity options?
• Do you need to explore your client’s health, or their dependants’ health in more detail?
• Do your clients understand the implications of fixing an income for the rest of their lives?
• Does your client understand that the total income received may be less than the amount used to buy the annuity?
• Does your client understand the importance of accurate medical information, and that we could reduce income to standard rates if a condition isn't supported by a doctor?
• Depending on what options your client chooses, they may receive a smaller income or may not be able to benefit from some of the other options

Possible alternatives to the Pension Annuity include:

• With-Profits Pension Annuity
• Income drawdown
• Other Open Market Option

For more information on product suitability please refer to the Target Market Statement which can be found here.