A Fixed Term Flexible Annuity is available for those who do not require a lifetime guaranteed income from their pension fund.
At the outset of the plan you decide what terms suit your needs. As the product is not invested it means that there are no ongoing fees or charges applied and there is no risk that your fund value could fluctuate. The term of the plan can be anything from 1 year to 25 years and the quotations are guaranteed.
With a Fixed Term Flexible Annuity you can release your tax free cash and elect to take any amount of money over your chosen term. This can be from no income right through to eroding the fund entirely over a period of time. You can also decide to take a set income over a period of time and then review the market again at the end of the term. If this option is chosen then a “Guaranteed Maturity Value” is given and at the time of starting the plan you know exactly how much will be available to you at the end of the plan.
These plans offer:
- No investment Risk
- A way to withdraw the fund over a period of time
- A tax efficient alternative to withdrawing the fund as cash
- The ability to review your options at a later date
- Retain control of the funds
Things to consider carefully when looking at taking a Fixed Term option:
- If you opt to erode the fund over a set period of time at the end of the plan the income will just stop.
- It may affect your ability to claim benefits in the future if you have eroded a fund rather than providing a lifetime income for yourself.
- If you opt to have a Guaranteed Maturity Value to review the market with at a later date then annuity rates may have gone down or up and you may not be able to buy the same amount of income you would have been able to at the time you took out the plan.
