information

We use cookies to make sure your experience is as good as it can be. If you’re happy with that, just continue using the site. Learn more about cookies here.

skip to main content

Protected Retirement Plan

Fixed Term Annuity - value protection

Your client chooses at the outset whether they want to protect the full value of their annuity or just a proportion of it.

The maximum lump sum payable under value protection is the initial annuity purchase price, less the sum of the income paid from the annuity.

Beneficiary's annuity

Your client can choose to have both options when they take out a pension annuity, so this may also be paid on death.

Who could benefit from value protection?

  • Clients concerned about losing out on their pension fund on early death, particularly those in ill health.
  • Clients more interested in lump sum death benefits than annuity income.
  • Risk adverse clients who want a guaranteed income stream and the reassurance of a lump sum death benefits if they die.

Full value protection

Full value protection gives your client the opportunity of providing a lump sum for their beneficiaries. It is equal to the initial annuity purchase price, less the total amount of income paid to both the annuitant and any beneficiary.

Partial value protection

Partial value protection works in a similar way to full value protection. However, only a proportion of the initial annuity purchase price is protected. In this case, the lump sum payable will be the proportion of the initial annuity purchase price protected, less the total of any income paid to both the annuitant and any beneficiary.

Taxation

Any lump sum payable under value protection is taxed at source.

If the annuitant dies before age 75, the amount will be paid tax-free.

In order to avoid the possibility of a further charge to inheritance tax, where possible we’ll exercise our discretion when selecting who should receive any lump sum death benefit, although the annuitant’s wishes will be taken into account.

The tax treatment of the plan will, in part, depend on your client’s personal tax status, which may be subject to change.

Please refer to the Key Features for details of how benefits from your client’s plan will be taxed.

Any references to taxation are based on our understanding of current legislation and HM Revenue & Customs practice which can change.

The cost of value protection

The cost of value protection varies by individual, and depends on a number of factors, including the annuitant's age and state of health.

To see what this means for your client, please phone our quotes team on 0800 085 0250 and we'll be happy to help. Our lines are open from 8.30am - 5.30pm Monday to Friday. For textdirect, first dial 18001.

FOR UK FINANCIAL ADVISERS ONLY
LV=, County Gates, Bournemouth, BH1 2NF, UK