Fixed Term Annuities

With a short term annuity, you use part of your pension fund to buy a fixed term annuity usually for 5 years, with the remainder of your fund either still invested or used to secure a guaranteed maturity amount.  At the end of the term, you can buy another short term annuity, and continue in this way until you decide to buy a lifetime annuity.

The policy can be set up as a joint life policy and can also include a guaranteed income period or Value Protection, which returns a lump sum equal to the initial investment less gross income paid to the point of death (less tax if the money is not reinvested for income).

Fixed Term Annuities are ideal for ‘keeping your options open’ as you get another chance to reinvest your pension fund at a later date.  This could be beneficial if in the meantime your health has deteriorated (so you may qualify for impaired or enhanced annuity rates), your spouse or partner has died (so you can reinvest on a single life basis) or your income needs have changed (perhaps because of an inheritance).

The main risk to be aware of is that future annuity rates are not guaranteed and the income you could secure in the future could be lower than that previously received.

A five minute conversation with one of our annuity specialists could provide you with an extra £20,000* of retirement income. Contact us today on 0117 9170736.