Lifetime Annuities & Scheme Pension

About Jack

Jack is 65 and about to retire. He isn’t a risk taker and has always been apprehensive about investing in stocks and shares. Despite this, Jack has built up £160,000 in his personal pension pot. He wants the peace of mind that his pension will allow him to pay the bills.

 What are Jack’s objectives?

Jack wants to take £40,000 tax-free cash immediately and then will use his remaining fund of £120,000 to provide a guaranteed lifetime income that keeps pace with inflation. He also wants to provide for his wife and children when he dies.

What does Jack get?

His adviser arranges a Lifetime Annuity that gives Jack an annual income of £5,000, which increases by 3% each year to keep track with inflation. This combined with his state pension is enough income to cover Jack’s essential outgoings. For extra peace of mind, he chooses a twenty-year guarantee period that will continue to make payments to his family if he dies before his 85^th birthday. Jack will look to use his tax-free cash for discretionary spending.