AVIVA Annuities

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Below we explain different types of annuities offered by AVIVA,UK

What is an annuity?

An annuity is a financial product which gives you a guaranteed income for life when you retire. Because pension savings don’t automatically do this, some people decide to use these savings to buy a retirement income product. An annuity is one of the options you’ll have if you want to do this

Aviva offers two different types of pension fund annuity:

  • Pension Annuity

A Pension Annuity provides you with a guaranteed income for the rest of your life. It is bought using money from your pension fund and is a low risk option. You may be entitled to a higher income depending on certain health or lifestyle conditions. You can buy a Pension Annuity with Aviva providing you have at least £10,000 remaining after any tax free cash is taken and any adviser charge is paid.

What are the benefits?

  • Guaranteed income. It promises to pay you a regular income for life.
  • Income choice. You can receive your annuity income monthly, quarterly, half-yearly or annually. Payments can be ‘in advance’ (from the start date) or ‘in arrears’ (at your chosen payment interval after the start date).
  • You may get a higher income if you don’t have a clean bill of health or you have (or have previously had) one of a range of medical conditions affecting your health or longevity. You may also be eligible if you have lifestyle conditions such as you smoke or are overweight.
  • No reduction in income. Once started, your annuity income will not go down, even if your health, or your spouse’s health, if applicable, improves.
  • Our Pension Annuity comes with a one year guarantee and 90 day value protection as standard. You can choose to extend your guaranteed period or value protection along with other options..

Things to think about

  • Depending on how long you live you may get back less than you bought your annuity for.
  • No cash-in value. Once you’ve bought an annuity it cannot be cashed in at any time.
  • What happens to your annuity when you die?

If you die within the first 90 days of the date your plan starts, Value Protection will apply and a lump sum will be payable to your estate. If you have a dependant named on the policy, Value Protection will apply if you both die within the first 90 days and will be payable to the estate of the last one of you to die.

If you die after 90 days but within your guarantee period, payments will continue until the end of the guarantee period. These will be paid to your estate or dependant on the policy.

If you have chosen for an income to be paid to a dependant and they are still alive, agreed payments will be made to them.

Please see your terms and conditions or contact your financial adviser for further information and exclusions which may apply to the above.

  • Changing your plan. The options you choose at the start of your plan can’t be changed.

Your options

You can:

  • Choose whether you receive the same amount each year, or your payments start off smaller, but increase either by a fixed percentage, typically 3% or 5%, or in line with inflation.
  • Choose from a number of options which determine the level of regular income you will receive
  • With Profits Pension Annuity

Your options

You can:

  • Buy a With Profits Pension Annuity providing you have at least £20,000 remaining after you’ve taken any tax free cash from your pension fund and paid any adviser charge.
  • Receive an income linked to the performance of the Aviva Life and Pensions UK Limited With-Profits Sub Fund which invests in a wide mix of assets (including company shares, fixed interest securities and commercial property) to help spread the risk.
  • Choose from a number of options which determine the starting level of regular income you will receive, for example adding a guaranteed period, spouse/civil partner/dependant benefits or the anticipated bonus level you select. Read more about the different options.

If you’d like to give your retirement income the potential to grow and you’re happy to accept an element of risk, you could choose this annuity which invests in the Aviva Life and Pensions UK Limited With-Profits Sub Fund.

What are the benefits?

  • Growth potential. The amount of income you receive has the potential to increase over time.
  • Smoothing process. This is a method of reducing the ups and downs in the value of your investment by paying out the returns through a system of bonuses. There may be times in extremely poor market conditions when smoothing cannot fully protect your pension income. Read more about bonuses and find a guide to this annuity plan below.
  • Income choice. Your income can be paid monthly or yearly, either ‘in advance’ (from the start date) or ‘in arrears’ (at your chosen payment interval after the start date).

Things to think about

  • Depending on how long you live you may get back less than you bought your annuity for.
  • Our Pension annuity comes with a one year guarantee and 90 day value protection as standard. For further details, please read the With Profit Pension Annuity Key Features. You can choose to extend your guarantee period along with other options.
  • No cash-in value. Once you’ve bought your annuity it cannot be cashed in at any time. You need to be sure its right for you as you might not be able to make any changes once its started.
  • Charges which apply. We take our charges into account when we work out your initial income and when we decide the bonus to be added to your pension income each year. More information can be found in the Key Features document.
  • What happens to your annuity when you die?

If you die within the first 90 days of the date your plan starts, and any dependant named on the policy dies before you, Value Protection will apply and a lump sum will be payable to your estate.

If you die after 90 days but within your guarantee period, payments will continue until the end of the guarantee period. These will be paid to your estate or dependant on the policy.

If you have chosen for an income to be paid to a dependant and they are still alive, agreed payments will be made to them.

  • Your income will vary. The amount of income you receive has the potential to go down as well as up. However, our guaranteed minimum floor means your income will never fall below a specified minimum amount. Please be aware that your income will not necessarily keep up with inflation.
  • Bonus calculations. Your income is based on the Anticipated Bonus Rate you choose and will fluctuate in relation to any regular and additional bonuses declared each year. Find out about bonuses and returns.
  • Changing your plan. After 12 months you can change the Anticipated Bonus Rate within the limits in force at the time, or you can convert your plan to a Pension Annuity. In both cases, we’ll recalculate your pension income. However, the other options you choose at the start of your plan can’t be changed.
  • Immediate Life Annuity

An Immediate Life Annuity is a retirement income plan that can be bought with your own money from non-pension sources. It can be bought with savings, investments, inheritance or the tax free cash lump sum from a pension fund. This annuity can provide you with a tax efficient, additional income from the age of 55. It provides you with a guaranteed income for the rest of your life and can be seen as a low risk choice.

What are the benefits?

  • Guaranteed income. It promises to pay you a regular income for life, so it’s a low risk option.
  • Income choice. You can receive your income monthly, quarterly, half-yearly or annually. Payments can be ‘in advance’ (from the start date), or ‘in arrears’ (at your chosen payment interval after the start date).
  • Tax Advantages. HM Revenue & Customs may agree that part of your payment is a return of capital and therefore not subject to tax. Tax treatment will depend on your personal circumstances – a financial adviser will be able provide you with more information about your tax position. Tax rules may change.
  • No surprise charges. We take our charges into account when we work out the price of your initial annuity.

Things to think about

  • Depending on how long you live you may get back less than you bought your annuity for.
  • Our Immediate Life Annuity comes with a one year guarantee and value protection as standard. You can choose to extend your guarantee period along with other options.
  • No cash-in value. Once you’ve bought an annuity it cannot be cashed in at any time.
  • What happens to your annuity when you die?

If you die within the first 90 days of the date your plan starts, and any dependant named on the policy dies before you, Value Protection will apply and a lump sum will be payable to your estate.

If you die after 90 days but within your guarantee period, payments will continue until the end of the guarantee period. These will be paid to your estate or dependant on the policy.

If you have chosen for an income to be paid to a dependant and they are still alive, agreed payments will be made to them.

Please see your terms and conditions or contact your financial adviser for further information and exclusions which may apply to the above.

  • Changing your plan. The options you choose at the start of your plan can’t be changed.

Your options

You can:

  • Buy an Immediate Life Annuity with a personal sum of at least £7,500 (after any adviser charge has been paid) from savings, investments, an inheritance or tax-free cash lump sum from a pension fund.
  • Buy an Immediate Life Annuity with a minimum sum of £100,000 (after any adviser charge has been paid) if it is purchased by the trustees of a will or settlement.
  • Choose whether you receive the same amount each year, or your payments increase by a fixed percentage between 0% and 5%.
  • Choose from a number of options which determine the level of regular income you will receive.

 

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