A Fixed Term Annuity allows you to access the Annuity over a set period of time, 5 years or to age 75, without being exposed to investment risk. At the end of the term, a predetermined guaranteed sum will be returned enabling the purchase of a further Fixed Term Annuity, conventional Annuity or an Unsecured Pension.
Should value protection be built in, the underlying Fund value will be returned to the Estate less a tax charge in the event of death of the Annuitant.
As Fixed Term Annuities operate on the Drawdown rules, the income can be set from anything from 0% to the Annuity equivalent, with a reservation of death benefit.
Fixed Term Annuities are suitable for those who do not wish to purchase an Annuity, which is irreversible and a measure for life, but no longer wish to be exposed to investment risk.
A key advantage of Fixed Term Annuities, outside of the security and certainty of income, is that one has the facility to purchase an Enhanced or Impaired Life Annuity in the instance that one’s health deteriorates or changes further into retirement.
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