20 February 2019

Fixed term annuities – for the unforeseeable future

No one can predict the future; we can only help clients to plan for it.

As you know, a ‘once and done’ approach to planning no longer suits the many different needs of those retiring today. Flexible, tailored retirement plans that are reviewed frequently are now essential to ensure good client outcomes.

It’s perhaps been overlooked that fixed term annuities can provide the right balance of security, flexibility and control for some clients. They provide a regular, guaranteed income and can be used to cover your clients’ essential spending, to bridge an income gap or to allow clients to keep their future options open.

Keeping your clients’ future options open

To suit your clients’ needs you can tailor the time period over which they receive a guaranteed income, which could suit people who are undecided about their long-term retirement plans. With our fixed term annuities your clients can choose terms of 3 to 40 years, which also gives you the opportunity for you to re-engage with them at the end of the plan.

It can also be a chance for those clients who are worried about market volatility to re-evaluate if they’re still comfortable with higher-risk investments and the potential impact on their income and retirement funds. A fixed term annuity will provide a secure income for the period chosen by your client, and can also give a guaranteed maturity value which they can choose to reinvest as they wish.

Security and peace of mind

For your more risk averse clients, a fixed term annuity can provide an viable alternative to flexi access drawdown as it can give them regular access to their pension pot with the security of knowing it's not affected by market performance.

A fixed term annuity can help your clients stay in control of their finances as they know what they'll receive and when. And they can choose to have a lump sum at the end of the term. With a maturity value your clients will also have the option to choose how they reinvest this money.

Our fixed term annuities have a full surrender feature in case your clients’ circumstances change significantly and they need to cash in the value of their plan. This gives your clients the reassurance of knowing that if they need to access their money, they can.

More flexibility than you might think

We currently offer two fixed term annuities; a Cash-Out Retirement Plan and a Fixed Term Retirement Plan. Both can provide a guaranteed income for a period of time. Selecting a fixed term annuity isn’t a ‘once and done’ decision for life and can help you to flexibly plan and adapt your client’s retirement income options.

The Fixed Term Retirement Plan also comes with a guaranteed maturity value and the flexibility to mould the plan to your client’s needs. They can base the plan on either the amount of the regular income they’d like to receive or the amount of the guaranteed maturity value. Alternatively you could select to just have a guaranteed maturity value and no income payments at all. This could be suitable for clients who aren’t comfortable investing their money in the financial markets but still want their money to work for them.

Additionally, we’ve recently launched a partial withdrawal option with our Fixed Term Retirement Plan. Clients who’ve selected a guarantee minimum payment period for the full term can make up to three partial withdrawals from their maturity value if they need to. This could be if they need to make emergency repairs to their home, or experience an unexpected life event. In any event, they now have the option of some additional added flexibility.

Find out more about our Fixed term annuities and how they could help you plan for your clients’ unforeseeable future.

View - Fixed term annuities 

These plans do not pay an income for life.

The minimum amount your client can withdraw is £5000 at a time.