Pension Annuity

What is a Pension Annuity?

A lifetime annuity which pays your client a regular income, guaranteed for the rest of their life.

Your client can tailor the income to meet their needs, so they'll know exactly what they'll be receiving and when. Options could include; 

  • Your client may receive a higher income, also known as an enhanced income, if they have certain health or lifestyle conditions, such as smoking and being overweight.
  • An option to have income which increases annually to protect against inflation.
  • A range of death benefits to provide income for dependants in the event of your client's death.
  • Clients can choose payment frequencies to be monthly, quarterly, half yearly or yearly; in advance or in arrears.

Who is our Pension Annuity for?

  • Clients aged 55 and over (75 is the maximum age for enhanced)
  • Clients who want a guaranteed income for life
  • Those who don't want their pension pot to be subject to any investment risk
  • Clients wanting to buy annuities in stages to make up a reduced wage or salary
  • A client who wants to manage their income to maximise tax efficiencies
  • Clients who have a pension pot of at least £5,000, after any tax-free cash and an adviser charge, if applicable.


How a Pension Annuity can help?

  • Can provide an income for your client as well as what they receive from a State Pension.
  • Could help your client who is concerned about inflation and would prefer an income which increases annually.
  • Can reduce the investment risk of some or all of your client's pension pots.
  • Can be used as part of a phased retirement, partially buying annuities to reduce investment risk on pension pots gradually.
  • Can provide death benefits such as spouse's pension or a guaranteed minimum payment period. 

There are risks to your client too. They include:

  • They could lose money. Pension annuities don’t have a ‘cash-in’ value and the total income paid from your client’s annuity could be less than the amount they used to buy it. A guaranteed payment period and/or dependant's pension can be added to reduce this risk.
  • Timing. The amount of pension income we’ll offer your client will be based on our annuity rates at the time. If they buy when rates are low, their income will reflect this.
  • Inflation. Price inflation can reduce the real value of your client’s income over time, which could mean that it doesn’t stretch as far in future years.

An increasing income can reduce this risk.

  • Once and for all decision. Once their annuity is in payment your client can't change any of their payment options, even if their circumstances change.
  • Deteriorating health. The pension income we offer your client will be based on the information they provide when they apply. If their health subsequently deteriorates, we won’t be able to increase their income.

Our other income products

Cash-Out Retirement Plan

Fixed Term Retirement Plan