The Just Retirement Fixed Term Annuity is designed to give you more flexibility and control in retirement. Available through financial advisers, it is a type of drawdown arrangement that provides a guaranteed income (within government limits*) for a term of your choice, from three years up to a maximum of 15 years.
You will receive a Guaranteed Maturity Amount (GMA) to reinvest in another pension product of your choice providing you survive until the end of the term. The level of income you can buy with the GMA is not guaranteed and could be higher or lower than the amount you received from your Plan.
Greater flexibility The GMA is not affected by investment performance risk and is known from outset. It gives you the ability to adjust your planning needs at the end of the Plan term to take account of changing circumstances, such as:
- Poor health – you may be fit and healthy today, but what if your health was to deteriorate later on in retirement? If it does, you may qualify for an enhanced annuity.
- Marital status – you might get divorced, married (or remarried) or your spouse/civil partner may die before you. If so, you might want to amend your Plan benefits to match your new status.
- Income needs – these may change later in retirement. For example, an inheritance from elderly relatives may mean you don’t need as much income from your pension fund later on in retirement as you do today.
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
- The higher the level of income you select at the start of the Plan, the lower the Guaranteed Maturity Amount will be.
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 the option Plan Protection at the outset, which allows you to convert to an enhanced annuity, as well as having access to the Open Market Option, before your fixed term comes to an end, providing you qualify. Read more about the enhanced annuity conversion feature here.
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.
* Government limits: the income you can take from the Just Retirement Fixed Term Annuity is subject to limits set by Her Majesty's Revenue & Customs (HMRC) in conjunction with the Government Actuary's Department (GAD). The current maximum income limit HMRC will allow is 100% of the equivalent amount available under a standard annuity, using rates set by HMRC according to GAD.
Useful links Read more about the conversion feature
Questions about annuities