Alan case study FTIP

Fixed Term Income Plan - Alan


  • 60 years old
  • Healthy
  • Would like to retire keeping his options open
  • Wants to access his tax-free cash
  • Wants an income until state pension becomes payable

A retirement solution

Alan decides to retire and wants his tax-free cash and a secure income for the next five years. He does not want to opt for a lifetime income at this stage because he prefers to reassess his options once his state pension becomes available.

After taking his tax-free cash his remaining pension pot is worth £100,000. He uses this money to purchase a fixed term income plan, giving him a fixed income of £5,000 each year for the next five years. At the end of 5 years the plan will also provide Alan with a Guaranteed Maturity Value (GMV) of £80,000.

At age 65, Alan’s state pension is payable so he can reassess his options.

Please note that the figures used in this example are for illustrative purposes only.

Key benefits

  • Access your tax-free cash at the start.
  • Choose how much income, if any, you need at the outset of the plan.
  • Choose the term and frequency of any income payments.
  • Choose to have a GMV paid to you at the end of the term.
  • Allows you to reassess your options at the end of the plan term.

FTIP options

The FTIP lets you choose a guaranteed income and/or GMV. You can decide on the amount of income and for how long you want that income to be paid (up to 20 years). If you choose a GMV, you will also receive a lump sum at the end of the term.

Death benefit

Should you die within the term of the plan your beneficiary will receive a lump sum death benefit equal to the initial investment less income already taken and any adviser charge you agreed. This lump sum death benefit can also be paid into a beneficiary’s flexi-access drawdown.

Important information

The plan does not pay an income for life and where a GMV is paid at the end of the term this may not be enough to provide you with the same level of income or be sufficient to purchase another FTIP. You should speak to a professional adviser to ensure that any retirement product is suitable for you.

Who is it suitable for?

The FTIP may be suitable, if you are aged 55 or over, with at least £10,000 to invest and looking for guaranteed income and/or a GMV, for a fixed term, without locking into an income for life.

You should speak to a professional adviser to ensure that any retirement product is suitable for you.

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