Hodge Lifetime
Purchased Life Annuity Plans
Hodge Lifetime is the trading name of Hodge Life Assurance Company Limited and Julian Hodge Bank Limited offering retirement products of both companies. Hodge Lifetime is able to offer a variety of Purchased Life Annuity plans enabling purchasers to improve their income from surplus cash sums they may have available.
Depend on our financial strength
Hodge Life Assurance Company Ltd is a well-managed and highly capitalised company.
Its financial strength can be judged by the fact that it has capital and reserves of £49 million with supporting assets of £150 million – a higher ratio than many others in the same industry.
Hodge Life Assurance Company Ltd is a subsidiary of Julian Hodge Bank, which is an authorised institution under the Financial Services and Markets Act 2000. The Bank has an excellent reputation for providing competitive products to the personal savings market and is consistently quoted in the “Best Buy” tables of the financial press.
Julian Hodge Bank is also a well capitalised, well-managed group of companies with capital reserves of £155 million and total assets of over £749 million – a very strong ratio for the banking industry.
We consider ourselves big enough to deliver, but small enough to care.
Does your client need extra income?
A Purchased Life Annuity can provide a guaranteed income that will remain unaffected by any changes in interest rates. As a result your client can budget with certainty for the future, in the knowledge that their gross income from the plan will remain constant. In addition, the income they receive will usually be greater than that available from savings accounts at banks or building societies.
Does your client have a cash sum?
Consider a Purchased Life Annuity from Hodge Lifetime if your client has a cash sum available from any of the following:
- An inheritance
- A gift
- A tax-free cash sum from a pension fund
- A redundancy payment
- The sale of a house
- A maturing life policy
- Share encashment
What is a Purchased Life Annuity?
A Purchased Life Annuity uses a cash lump sum to provide a guaranteed gross income for life, or a period of between five and ten years.
You should be aware that at the end of the term selected or upon death, there will be no return of the cash lump sum unless one of the guaranteed options has been chosen. In addition, once purchased, the annuity arrangements cannot be altered or cashed in.
Our Purchased Life Annuity is available for any person above the age of 50 and can be set up as follows:
- Single Life
- Joint Life/Last Survivor, when payments will continue after the death of the first annuitant and only stop on the death of the second annuitant
Please note that income from a joint annuity is usually less than for a single life. Income can be paid either on a monthly or annual basis, in arrears.
It is possible for the income to be based on the life of someone other than the purchaser.
How much can be paid into a Hodge Lifetime Annuity?
The minimum purchase price is £5,000. There is no maximum purchase price, but purchases over £250,000 will be considered on referral only.
Are annuity payments taxable?
The gross income payments from a Purchased Life Annuity are regarded for tax purposes as being made up of two separate parts – a capital amount and a taxable amount.
The capital amount of the income payment is set by Inland Revenue rules. This part is regarded as the return of capital and is not taxed. As a result, the full amount gross of tax is payable.
The taxable amount is regarded as investment income. This part of the annuity payment is normally paid by Hodge Lifetime net of savings rate tax. Higher rate taxpayers will be liable to pay additional tax direct to the Inland Revenue. Starting rate tax payers may be able to reclaim part of the tax deducted.
To ensure that a part of your clients income payment is regarded as returned capital, you should ensure that they complete the Inland Revenue form PLA6 when completing the annuity application.
Non-taxpayers should complete Inland Revenue form R89, or R86 for joint purchasers, to ensure that we are able to pay the annuity income gross.
The choice of annuities:
There are several different types of Purchased Life Annuity offered by Hodge Lifetime.
Temporary annuities:
With a temporary annuity an annuitant is able to obtain a fixed income in exchange for a cash lump sum for a set period as agreed at the outset. This period can be set for 5, 6, 7, 8, 9 or 10 years.
A temporary annuity will cease at the end of the period chosen or if earlier on the death of the annuitant (or surviving annuitant). For example if a 10 year annuity is selected and the annuitant dies after 8 years and 10 months, the annuity payments will cease on their death.
Two guarantee options are available with a temporary annuity which include:
- Nil Guarantee – this plan offers the highest rate of return in exchange for a cash lump sum. If the annuitant (or surviving annuitant) dies within the period of the agreement, payments will cease and the plan will terminate.
- Capital Guarantee – if the annuitant (or surviving annuitant) dies within the period of the agreement, Hodge Lifetime will pay a lump sum equivalent to the shortfall between the gross payments already made and the purchase price.
Lifetime annuities:
With a Lifetime annuity an annuitant is able to obtain a fixed income for life in exchange for a cash lump sum.
Various guarantee options are available with a Lifetime annuity which include:
- Nil Guarantee – this plan offers the highest rate of return in exchange for a cash lump sum. Payment ceases on the death of the annuitant (or surviving annuitant).
- Capital Guarantee – when the annuitant (or surviving annuitant) dies, Hodge Lifetime will pay a lump sum equivalent to the difference between the gross payments already made and the purchase price.
- Guaranteed Annuity – this plan offers a guarantee period of either five or ten years from the initial income payment. If the annuitant (or surviving annuitant) dies during the guarantee period, a commuted lump sum payment will be made to the estate.
Please refer to the Key Features for further information on the above products.
Next: Purchased Life Annuity key features
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Hodge Lifetime by calling our
Broker Support Unit on:
0800 731 4076
