Key Features of the
Guaranteed Pension Annuity
The Financial Services Authority is the independent financial services regulator. It requires us, Hodge Lifetime, to give your client this important information to help them decide if this pension annuity is right for them. Your client should read this carefully so they understand what they are buying; and keep it safe for future reference.
Your client can only buy this annuity with money from certain types of pension fund, using the open market option. In exchange for their fund, we promise to pay your client an income for the rest of their life.
Its aims
- To pay your client a guaranteed income for the rest of their life.
- If your client chooses a minimum guaranteed payment period and dies during that time, we promise to keep paying their annuity income for the remainder of the guarantee period.
- If your client chooses a dependant’s annuity and they die first, we will pay their named dependant all or some of their annuity income for the rest of their dependant's life. Your client chooses how much they will get. (The dependant's income starts once any guarantee period expires, see above).
- To let your client choose how often they want us to pay their income.
Your client's commitment
When your client buys this annuity they will be entrusting all or part of their pension fund to us, for life.
Your client can’t change providers later on (see Risks). If they want to take a commencement lump sum from their pension, they must ask their existing pension provider to pay this to them before they transfer their pension fund to us. Otherwise they will lose the chance, forever.
Your client must tell the truth on their application form. If false information or missing information leads us to pay them a higher income than they are actually eligible for, we will recover the overpayments and reduce future payments. In extreme cases, their annuity could even be cancelled.
Risks
This policy has no cash in value at any time. If your client dies in the early years of the policy, unless they have chosen a dependant’s annuity and/or a guaranteed payment period, they will get back much less than they paid for the annuity.
Your client's income from this annuity will not go up. So, in future years any increases in inflation or income tax will reduce what they can buy with this money.
We don’t take your client's (or their dependant’s) health into account in setting our annuity rates. If your client (or their dependant) smoke or have any medical or health problems they may be eligible for more income from another provider.
Your client's pension funds could go up or down in value before we receive them. If they go up your client will get a higher income. If they go down they will get less.
Once your client has bought this annuity, and the cancellation period has ended, even if their circumstances change, your client will no longer have access to the funds they have paid to us.
This means your client won’t be able to:
- Cash it in or get a refund
- Pay it back into their original pension plan or scheme
- Switch to a different annuity provider
- Alter or remove any of their chosen annuity options (e.g. the dependant’s annuity if there is no longer a dependant).
Next: Guaranteed Pension Annuity Questions & Answers
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Hodge Lifetime by calling our
Broker Support Unit on:
0800 731 4076