A Fixed Term Annuity (FTA) is an investment within a drawdown plan which provides guaranteed income payments for a set number of years.
At the end of the term there will be a guaranteed maturity payout which can be reinvested in an annuity or a drawdown plan.
The policy can be set up on a joint life basis and with a guaranteed income period or value protection option. This means that on death before the policy matures, income payments will continue to a surviving spouse / partner or a lump sum less 55% tax can be paid depending on the options chosen.
Both Living Time and LV= offer two types of Fixed Annuity. A plan for a set number of years, (minimum term of 3 years), or a plan to age 75. Both plans have the following features:
If your future circumstances change you have the flexibility to choose the appropriate options when your plan reaches maturity
If you die before the end of the plan term the maturity amount will not be payable unless you have selected death benefit options.
You may benefit from the opportunity potentially to obtain a higher income in the future if your health has worsened during the term of your Living Time Plan
The amount of annuity income will be dependent upon annuity rates at that time, which may be better or worse than current rates
Fixed Term combines some of the advantages annuities with some of the advantages of drawdown
Fixed Term plans are NOT suitable for those who want the certainty of a guaranteed fixed income for the rest of their lives
Past investment performance provides no guide to future performance