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Guarantee periods
Annuities pay out a monthly income until death, at which time payments cease unless you have selected the spouses pension. If you died soon after arranging an annuity then it may mean that you have not seen a great deal of benefit from the sum that you used to fund the purchase.
A guarantee period means that even if you die within the early years then the annuity will pay out regardless for a set period of time, which you select. By adding this option the amount of income that you receive may be reduced to reflect the enhanced option.
As an alternative to a Guaranteed Annuity, on Purchased Life Annuities some providers offer a Capital Protected annuity. Here the provider guarantees to repay (either by way of income or refund on early death) the original amount invested. So if you purchase an Annuity with £100,000 and you are due to receive an income of £10,000 per annum and you die 5 years later, as you will only have received £50,000 your estate will receive the remaining balance of £50,000. Once again this protection comes at a cost and is only offered by a few providers.
If you have an old or frozen pension plan then you should have it reviewed by the qualified experts.
You may be able to:
- Increase the value of your pension
- Unlock your pension
- Consolidate your plans
- Save £thousands in pension charges
- Access better performing funds
- Release tax free cash from your plan
- Receive an immediate income
