A guaranteed pension income
Our Pension Annuity is for clients looking for a guaranteed income for life. They can choose from a range of payment options too, like how often they’re paid. But once bought, a Pension Annuity cannot be changed or cashed in, even if your client’s personal circumstances change.
Certain health or lifestyle conditions can mean a higher income, even if they’re in a client’s history
No extra charges
All charges for setting up and running the annuity are accounted for when setting the income level
We’re happy to facilitate an adviser charge, with various options available
Why 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
- Clients can choose to receive their income monthly, quarterly, half-yearly or yearly
- 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
- Sophisticated pricing ensures a personalised quote for every client
- Higher rates if a covered spouse or dependant has a health condition too
Facts and figures
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 (minimum recipient age is 20).
The maximum age at which we can set up a Pension Annuity from full fund transfers or the Open Market Option is 90.
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. 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.
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.
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.
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.
1% plus uplift, or 1.5% plus uplift when your client’s plan takes into account health and lifestyle conditions. Rebating in 5% steps is allowed.
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 dependant’s. 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:
- 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 realise 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
Key documents and resources
The type of Equity Release we offer is a lifetime mortgage. We have two products, one which provides a cash lump sum, the other adding the flexibility of a cash reserve for further withdrawals.
Solutions for clients who need long-term care for a physical disability or mental impairment. Our plans help to fund care fees for people either currently receiving care or about to receive care.
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