What are my options?

You can only buy our With Profits Annuity through a financial adviser.

The options available for our With Profits Annuity are largely the same as for our Pension Annuity, except that you can’t guarantee your income will increase each year, but you do have some degree of flexibility once your income is in payment.

When buying a With Profits Annuity, you must firstly select what we refer to as your ‘Anticipated Bonus Rate’ (ABR). The ABR is your means of determining your starting level of income and will also play a large part in the future level of income you’ll be paid.

You will then need to tell us how you want your pension income paid and whether you want to include optional death benefits from your annuity.

The cost of each of the options you choose will be taken into account in the annuity we offer you so your choices will have a bearing on your starting level of income.

1) What is your chosen Anticipated Bonus Rate (ABR)?

You will need to choose an ABR of between 0% and 4% (in multiples of 0.1%).

The lower the ABR you choose, the lower your starting level of income but there will be 
a greater likelihood of future increases. This is because the bonuses we declare (see 
How do With Profits funds work?) are more likely to exceed your chosen ABR in any given year.

The higher the ABR you choose, the higher your starting level of income but the less likely our bonuses are to exceed your chosen ABR. Your income is more likely to fall as a result.

It’s important that you ask your financial adviser to get you a number of quotes to show you how the ABR you choose will affect the income you’ll be paid.

2) How do you want your pension income paid?

You will need to tell us whether you want your income paid in advance or in arrears and the number of instalments each year. Instalments can be:

• yearly - 1 yearly instalment
• half-yearly - 2 instalments each year, every six months
• quarterly - 4 instalments each year, every three months
• monthly - 12 monthly instalments.

Yearly in arrears is the cheapest option and yearly in advance the most costly.

3) Would you like to add a guaranteed payment period?

Our With Profits Annuity will pay you a pension income for the rest of your life but income payments will stop when you die.

You can however arrange for income payments to continue for a period of between 1 and 10 years from your annuity start date. If you die during that period, your income will continue until the end of the guaranteed payment period.

The longer the guarantee period the more costly this option is.

4) Do you want to provide an income for your partner if you die before them?

You can choose for your partner (spouse, registered civil partner or financially dependent partner) to continue to receive a percentage of your pension income after you die.

The larger the percentage, the more costly this option is. An unmarried partner will need to prove they were financially dependent on you at the time of your death. Your dependant's pension will continue for the rest of their life and will be taxed as income.

5) Is your dependant’s pension for a named partner?

If you’re married or in a registered civil partnership, you can decide whether you want a pension paid to your current partner (‘named’), or paid to your partner at the time of your death (‘any’).

Named is cheaper but if you choose this option and you re-marry, your partner at the time of your death (if different) will not be entitled to a dependant’s pension.

If you’re not married or in a registered civil partnership when you buy your annuity, and you want to provide benefits for your partner when you die, you must name them on your application.

Help

You can only buy a With Profits Annuity with us through a financial adviser.