About Annuities
Fixed Term Annuities
A Fixed Term Annuity combines the advantages of an income for a fixed term (up to age 75) with the advantages of a certain amount of flexibility over income levels and death benefits.
Fixed Term Annuities keep your options open for longer
When a traditional (non-profit) annuity is set up, the options selected cannot be changed a later date even if the circumstances change. For instance if it is a joint life annuity and the partner dies first the annuity cannot be re-priced to reflect the higher rates for a single life annuity. Or if your circumstances changed and you wished to alter the level of income, you cannot change your income.
However, with a Fixed Term Annuity, you can set the term of your Plan to as little as 5 years (and a maximum ceasing age of 75) which allows you to reassess your income and benefit needs at a later date. This could allow you to react to changing personal circumstances (such as ill health or the death of a partner/spouse), financial circumstances (such as inheritance of wealth from elderly relatives) or legislative and regulatory circumstances (such as changes to pensions law and the introduction of new products).
The advantages of Fixed Term Annuities
- Greater flexibility over the level of income selected at outset.
- More generous death benefits than a conventional lifetime annuity, including Value Protection which returns a lump sum equal to the initial investment less gross income paid to date (less a tax charge if not being reinvested for income).
- No investment performance risk – you know exactly what you will get back if you survive until the end of the term and we provide a fixed-term income (subject to GAD limits).
- Keeps your options open – allows you to change your plans later on in retirement to suit your changing personal and financial circumstances.
The disadvantages of Fixed Term Annuities
- Annuity rates in the future may be lower than they are today so, at the end of the term, you may not be able to secure the same level of income. You could be worse off than if you had invested in a lifetime annuity today.
- If you do not select any death benefits, no further income or Guaranteed Maturity Amount is payable after your death. The Plan will cease with no further value.
- Once invested (after the 30 day "Your Right To Change Your Mind" period has expired) you cannot withdraw your funds or change the benefits until the end of the Plan term, which for the 75 Plan will be the day before your 75th birthday.
| Suitable for: |
Those who want to ‘keep their options open’ for longer to react to changing circumstances later in retirement.
Those who like the flexibility of conventional drawdown – more generous income limits and death benefits – but are risk averse and not prepared to expose their pension fund to stockmarket volatility |
| Not suitable for: |
Those who want the absolute certainty of a guaranteed income for the rest of their lives.
Those who are not prepared to accept the risk that annuity rates may be lower in the future than they are today, which could mean a drop in income when they reinvest the maturity sum in a new appropriate pension product. |
Fixed Term Annuities are currently available from Living Time:
Living Time 75 Plan
- The term of the Plan is set to run to the day before your 75th birthday (minimum term 9 years)
- Default fixed-term income is comparable to the "Best in Market" lifetime annuities
- Guaranteed Maturity Amount at age 75 providing the Plan holder survives until maturity. Not affected by stock market volatility.
Living Time Income Plan
- Minimum term normally 5 years
- Income can be set to as high as 120% of standard annuity rates (the current Government Actuary's Department (GAD) maximum)
- Guaranteed Maturity Amount at the end of the term providing the Plan holder survives until maturity. Not affected by stock market volatility.
