info
We use cookies on this website and by continuing to use the website you are consenting to this. The cookies we use do not record or store your personal information. Please read our privacy policy to find out how to manage your cookie settings.

Fixed term annuities

A fixed term annuity is a type of drawdown arrangement that offers an alternative to conventional retirement income solutions, ideal for those who want to keep their options open in case their circumstances and financial planning needs change later in retirement.

How does it work? In return for investing in a pension fund from an existing pension scheme, a fixed term annuity pays you a fixed income - within government limits* - for a fixed term (typically for five years or more). You can choose the level of income you want to take at the outset, within those limits, plus any additional death benefits you want to include with your plan. These could be used, for example, to pass on a lump sum to a dependant or a beneficiary if you were to die before the end of the term.

If you survive until the end of the term, you will receive a guaranteed maturity amount, which you can use to reinvest into another pension product. This amount is known and fixed at the outset, and is not affected by investment performance.

Considerations Whilst the maturity amount is guaranteed, annuity rates in the future are not. This means future income levels may be higher or lower, compared to a standard annuity purchased today. Read about the advantages and disadvantages of fixed term annuities.

We would always ask you to discuss your situation with a financial adviser. If you don't have an adviser you could use Unbiased.co.uk to help you find one local to you

Talk to your financial adviser

Find a financial adviser at unbiased.co.uk

* Government limits: the income you can take from a fixed term annuity is subject to limits set by Her Majesty's Revenue & Customs (HMRC) in conjunction with the Government Actuary's Department (GAD). Useful links Financial advice and support 
Just Retirement's Fixed Term Annuity

Got a question?

Answers to common annuities questions

Click here >



UA-3469541-3