Retirement Product Fixed Term Income Plan Stability 1360X784

Fixed Term Income Plan

Plan ahead with confidence

Here’s everything you need to know about our Fixed Term Income Plan ­– key features, how it works, helpful links, guides and brochures.

Eligibility

You must be:

  • At least 55 years old
  • Live in the UK
  • Have at least £10,000 of pension savings held in a UK registered pension scheme after taking tax-free cash

Structure

Our Fixed Term Income Plan is written under flexi-access drawdown rules. This means you can choose how much income you want to receive – although this must be set at outset. It will then guarantee an income for a set term. 

Aims

Our Fixed Term Income Plan aims to pay any combination of the benefits below that you choose at outset, over a specified term of 1-20 years:

  • A fixed regular income for the whole term, which can increase each year
  • A Guaranteed Maturity Value payable at the end of the fixed term, which then allows you to arrange another retirement product
  • A lump sum death benefit to your beneficiary(ies) if you die before the end of the specified term

Suitability

Our Fixed Term Income Plan may be suitable if you:

  • Need access to your tax-free cash and want to invest the remaining pension savings for a fixed term without taking any investment risk
  • Don’t want to commit to a guaranteed income for life at this time
  • Want the certainty of a guaranteed income and/or a guaranteed return at the end of the term

Options at term end

Our Fixed Term Income Plan allows you to use your Guaranteed Maturity Value to either:

  • Take all your money as a cash lump sum
  • Buy another Fixed Term Income Plan
  • Purchase a guaranteed annuity which provides an income for life
  • Transfer to another flexi-access drawdown plan

Tax on income

Your income is treated as earnings and is taxed under Pay As You Earn. The tax payable depends on your total income from all sources, as well as your personal allowance.

Death benefit

If you die before the end of the term, we’ll provide a guaranteed death benefit. This will be the original purchase price minus any income paid to you before tax, up to the date of your death, and any adviser charges you have instructed us to pay.

Tax on death

If you die before your 75th birthday, your beneficiary(ies) will receive a tax-free lump sum or tax-free income.

If you die from age 75 onwards, we’ll tax the payments at your beneficiary’s marginal rate of income tax.

Charges

We can pay any charges you incur from your financial adviser for advice or services from your pension money before it’s applied to the annuity. However, we must have your written instructions to do so.

What are the risks?

Our Fixed term Income Plan does not pay an income for life.

The Guaranteed Maturity Value at the end of the term may not be enough to provide you with the same level of income you might receive if you had bought a lifetime annuity instead.  

Taking any income from the Fixed Term Income Plan, in addition to your tax-free cash, will trigger the Money Purchase Annual Allowance. This reduces the amount you can pay into a defined contributions pension scheme to £4,000.

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