Fixed Term Annuity

A fixed term annuity is designed to give you more flexibility in your retirement. You can approach retirement in a series of stages, without having to make a one-off decision when you stop work.

Annuity income

• You can alter your future annuity income to reflect changes that may occur in your circumstances.
• You can select the amount of annuity income you require, between nil and the maximum allowable.
• You select the initial term, typically for a period of three years upwards.
• You can purchase another retirement product at the end of the selected term with your guaranteed sum.
• You can convert to an enhanced annuity and get a higher income if you fall ill during the selected term.

A fixed term annuity provides you with flexibility with your retirement planning. You’re not tying yourself into an annuity rate that is fixed for life. It is a type of income drawdown arrangement that provides you with a guaranteed income for a term you choose, and, at the end of your selected term you will receive a guaranteed sum to reinvest in another pension product of your choice, providing you survive until the end of the term.

Some fixed term annuities contain conversion features, which can allow you to convert to an enhanced annuity before your fixed term comes to an end, providing you qualify. Such a feature allows you to take advantage of potentially higher levels of annuity income should your health deteriorate before the end of your selected term. This is detailed below.

This table shows some of your choices when comparing a conventional lifetime annuity to a fixed term annuity.

Your pension

Adjusting your income

You have the ability to adjust your pension income requirements at the end of the selected term to take account of changing circumstances, such as:

• Poor health – you may be fit and healthy now, but what if your health was to deteriorate later in life?
• Marital status – you might get divorced, you might get married or your spouse/civil partner may die before you.
• Income needs – these may change later in your retirement. It’s possible you might require less income.

To find out a fixed term annuity might be right for you, request a free quote or call us free on 0800 1787 335.

Enhanced annuity

The conversion option

You could benefit from an enhanced annuity conversion option. Enhanced annuities offer a higher level of retirement income than available from conventional annuities for those suffering from a wide range of medical conditions, from relatively mild conditions to more severe.

The conversion feature allows you to convert your fixed term annuity to an enhanced annuity at any point during your selected term, providing your state of health or lifestyle enables qualification for an enhanced annuity. If your health does deteriorate later on in your retirement, you could potentially qualify for a much higher level of retirement income than you could get today.

Pension

The level of pension income you can take from a fixed term annuity is subject to limits set by HMRC in conjunction with the Government Actuary’s Department (GAD). The current maximum income limit HMRC will allow is 100% of the equivalent amount available from a standard pension annuity, using rates set by HMRC according to GAD.

To obtain your free, no obligation annuity quotes you can enquire online, or call us free on 0800 0124 374. One quick free phone call from you can make all the difference. We’re here Monday to Friday, 9 am to 6 pm.