Annuities

An Annuity is a product that provides guaranteed income for your life

It is purchased from your pension savings.  You are usually able to withdraw 25% of your pension plan as a tax-free Pension Commencement Lump Sum and the 75% balance is then exchanged for a guaranteed income (that is taxable as income) paid for the rest of your life.  An annuity can include the following options (selected at outset):

  • Provision to continue to your spouse if your die first at either the same rate, or two thirds or half.
  • Increase in payment to offset inflation or pay a higher income at outset, but remain level in payment.
  • A guarantee period or full capital protection to ensure that the annuity will provide a minimum return.
  • Fixed term annuities can be purchased which will pay for a fixed time period only.

We can help explain the options

Thompson & Richardson can help explain the right options for you.  We always request completion of a health form to make sure you benefit from any available enhancement to the annuity rates based on your health or lifestyle factors (e.g. smoking) and we search the whole of the market to get the highest annuity available.

Annuities give you certainty of income throughout retirement, but may prove poor value on early death and provide no flexibility for changing circumstances.