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Our Fixed Term Annuity

The Just Retirement Fixed Term Annuity is designed to give you more flexibility and control in and at retirement.  It is a type of capped drawdown arrangement  where an income is taken from your pension fund instead of using it to buy a lifetime annuity (see What is an annuity?).

Our Fixed Term Annuity provides a guaranteed income (within government limits*) for a term of your choice, from five years up to a maximum of 15, but without investment performance risk during the selected term if held to maturity. 

A guaranteed maturity amount (GMA) is calculated at the start of the Plan. If you live until the end of the term this GMA can be used to buy:

  • a lifetime annuity (either a standard annuity or an enhanced annuity if you qualify)
  • another Just Retirement Fixed Term Annuity
  • any retirement income product of your choice.

Greater flexibility and an innovative conversion feature The Just Retirement Fixed Term Annuity allows you to approach retirement in a series of stages, rather than making a ‘once and for all’ decision on the day you stop work. It also has an innovative conversion feature, available if you take out Plan Protection at the outset.  The conversion feature can be used to convert to another retirement income product, at any point during the Plan term, for any reason, if it suits your individual circumstances and financial advice has been given.

The conversion feature allows you to take account of changing circumstances such as:

  • health – you may be fit and healthy today, but if you or your spouse/civil partner's health was to deteriorate later on in retirement you may qualify for an enhanced annuity
  • personal circumstances – you might get divorced, married (or remarried) or your spouse/civil partner may die before you 
  • income needs – no-one can predict the future, and your finances may change later in retirement or external factors such as changing annuity rates may affect your decisions.

Read more about the conversion feature here.

You should also bear in mind the following risks

  • your selected level of income may be restricted during the term to ensure that it remains within limits set by the government (as adjusted by the government during the term)*
  • your situation may change after your income payments have started, but you cannot change the level of income selected during the Plan term
  • if Plan Protection is not selected, the option to convert into an alternative retirement income product will not be available
  • while the maturity amount is guaranteed, annuity rates could be higher or lower in the future. This should be considered when deciding the term of your plan, ie when it will end, and the suitability of exercising the conversion feature
  • the Just Retirement Fixed Term Annuity is designed to be held until the end of the term.  If you exercise the conversion feature, the income you may receive from another retirement income product may be higher or lower than your current income
  • your conversion value may be less than the Guaranteed Maturity Amount and the original investment if the conversion feature is exercised.

If you want to know more about the suitability, benefits and risks of our Fixed Term Annuity, including Plan Protection and the conversion feature, please speak to your financial adviser.  If you don’t have a financial adviser, you can get some help finding one here. 

Talk to your financial adviser

Find a financial adviser at unbiased.co.uk

* Please note: Wherever Government limits or income reviews are mentioned you should note that the March 2014 budget statement proposed to remove these limits from April 2015. This would mean that we no longer review your income periodically and restrict it accordingly. As per the terms and conditions of the plan we will not be in a position to increase your income beyond that originally selected.

If you require more information or advice as to how this may affect you, please speak to your financial intermediary.

 

Useful links Read more about the conversion feature 
Questions about annuities

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Answers to common annuities questions

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