A Fixed Term Annuity will pay for a regular income for a fixed-period, often 5 or 10 years, as well as a guaranteed maturity amount at the end of the term. You’ll be able to use the maturity amount to choose another pension income option and, as it’s guaranteed, you’ll know the exact value you’ll receive from the start
These plans offer a combination of security, as you know how much you will be receiving over the course of the plan and the maturity value, and flexibility, as you have control over what to do with your fund at the end of the term
You select the level of income you want over the course of the term of the annuity, plus you can choose to add additional features such as whether you want the income to continue for a spouse if you were to die first. Your guaranteed maturity amount will be calculated based on these factors and any additional investment growth
This flexibility provides you with the potential that you may be able to secure a better level of income after the term if, during the fixed-term, pension annuity rates improve, or if changes to your health mean that you would now qualify for an enhanced annuity
Fixed-term annuities have increased in popularity as the income from more conventional lifetime annuities has fallen. However, this flexibility does not come without risk in that you may not be able to secure the same level of income from your pension savings at the end of the term as you would have done at the start. For example, pension annuity rates may be lower than they were when you started your fixed.
To ensure that you find the best possible solution, our Pension Specialists will research the whole of the annuity market, including leading firms and specialist annuity providers such as Scottish Widows, LV=, Just Retirement and Prudential.
Our Pension Specialists will explain your annuity options and how they impact the pension income you receive, for example how often you’d like to receive your income payments, if you want your income to go up over time and whether you want to provide an income for a spouse or partner after you die
To discuss all your options in more detail please call one of our Pension Specialists at one of our regional offices who can recommend which options from the open market that are best for you.