Pension Annuity - Guaranteed income for life
Our Pension Annuity pays a guaranteed income for the rest of your life which you can choose to be paid at the same level each year or increase each year by a fixed percentage or in line with inflation measured by the Retail Price Index. It's bought with your pension fund.
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What is the minimum amount that can be used to buy your pension annuity?
The minimum amount used to buy your pension annuity is £10,000 after any tax-free cash is taken.
What options are available?
Generally, the more options you add the more it will cost you. However, some options will hardly impact on your income at all. You can choose for your pension to be paid at the same level or increase each year:
You will receive an income which will be paid at the same level for the rest of your life.
Your pension will increase by a fixed percentage each year for the rest of your life.
Your pension will increase in line with inflation each year as measured by the Retail Prices Index (RPI).
You can choose a dependant to continue to receive an income after you die. You can choose for this to be paid at the same level as your pension income or lower.
You can choose to add a guarantee for up to 10 years. If you die during this period your income will continue to be paid to your estate until the end of the guarantee period.
How frequently will my income be paid?
Your pension income can be paid monthly, quarterly, half-yearly, yearly. This can be paid either:
- 'in advance' (this means that the payment of your pension income will be from the start date), or
- 'in arrears' (this means that the payment of the pension will be one month, quarter, half-year or year after the start date, depending on the frequency of the pension payments chosen).
- 'chosen start date' (this means you can choose to have your pension paid on a certain date each month. The first payment must be paid within one month of the start date of the plan and is only available if paid monthly).
The options you choose will affect the amount of pension you'll get.
What are the charges?
We use your pension fund to pay our charges for setting up and running your plan. We do this by taking these charges into account when we work out your income. No further charges will be taken.
Can I change my mind?
It is important to choose an annuity that is right for you. The options you choose will reduce the income you receive. The options you choose at the start of your plan cannot be changed and once you have bought your annuity it has no cash-in value at any time.
You can change your mind within 30 days from the date you sign the application form. If you cancel during the 30 day period, we will claim back any tax free cash and any instalments that we may have already paid and then we will refund any payments that have been made to us. The refunded payments may be less than the amount paid to buy your retirement benefits if our annuity rates have changed.
Advice or quotes
You can ask for quote illustrations with different options so that you can see the difference they make to your pension income.
If you need help deciding which annuity is right for you and what options you need call one of our advisers on 0800 0561643. Any financial advice will only relate to the products of Norwich Union. Alternatively, if you would prefer independent advice, view details of your nearest financial adviser here.
WC01003 04/2008
