As an example, if you pay a lump sum of £10,000 or more in to our Purchased Life Annuity, you’ll get: <ul> <li>A guaranteed income for the whole of your life or for a fixed time period eg. 15 years</li> <li>The option of continuing the income for a set period of time after you die</li> <li>A range of options to suit your circumstances</li> </ul>

Optional features – income

When you set up your Purchased Life Annuity, you can choose to increase your income by a fixed percentage (up to a maximum of 10%) each year. You can also choose to receive your income on a monthly, quarterly, half-yearly or yearly basis.

Benefits on your death

You can choose from a number of death benefit options to avoid losing some of your investment if you die soon after you start taking income. If you don’t choose a death benefit option, your policy will end when you die. Please speak to your adviser for details of how these work.

In most cases, HMRC allows us to treat part of each income payment you receive as a return of the original lump sum you paid. They class this as the capital element, which means you won’t be taxed on your original payment. However, the difference between the gross income payment and the capital element is taxable as savings income.

We don’t give personal recommendations on the products we offer. To help you decide if the Purchased Life Annuity is right for you, you should speak to an adviser. If you don’t have an adviser, please visit <a rel="noopener" href="https://v2.unbiased.co.uk/enquiry/canada-life" target="_blank">Unbiased</a>.

Important information

Please be aware that our telephone lines will close at 4PM on Tuesday 23^rd of April, reopening at 9AM on Wednesday 24^th of April. We apologise for any inconvenience this may cause.

Purchased Life Annuity

A tax-efficient income for life or a specified term

This annuity lets you invest a cash lump sum in return for a regular, guaranteed, tax-efficient income. Depending on your needs, you can receive income over a specified term, or for the rest of your life. Just so you’re aware, you won’t be taxed on part of your income as it’s treated as a ‘return of your lump sum’.

Is a Purchased Life Annuity right for you?

Guaranteed income for life or a fixed period

What are the risks?

Just so you’re aware, you can’t change or cash in your policy once we’ve set it up. Tax rates may change in the future. It’s important that you speak to your adviser about protecting your lump sum. This is because the total income you receive might be less than your lump sum if you die shortly after your policy starts.

This product may be right for you if:

You have a lump sum of £10,000 or more that you would like to use to generate a guaranteed income for life or a fixed term
You are at least 35 years old

This product will not be right for you if:

You want to access all of your funds immediately as a lump sum
You want a flexible return and don’t need a guaranteed income
You have less than £10,000 to invest
You want to make regular or one off contributions
You want to withdraw all of your funds immediately in one go.

Need an adviser?

Need an adviser? A financial adviser can help you get a tailored quote for our products. Read up on how to find an adviser and what to expect from the advice process.

Find a Financial Adviser

Frequently asked questions

As an example, if you pay a lump sum of £10,000 or more in to our Purchased Life Annuity, you’ll get:
- A guaranteed income for the whole of your life or for a fixed time period eg. 15 years
- The option of continuing the income for a set period of time after you die
- A range of options to suit your circumstances
In most cases, HMRC allows us to treat part of each income payment you receive as a return of the original lump sum you paid. They class this as the capital element, which means you won’t be taxed on your original payment. However, the difference between the gross income payment and the capital element is taxable as savings income.