Annuity Guarantee Period

Annuity Guaranteed Periods and Capital Protection – Pensionfinder

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    Annuity Guaranteed Periods and Capital Protection

    Annuity Guaranteed PeriodsAnother useful option to have is guaranteeing your income from the beginning of a lifetime annuity. This means that you can guarantee your income for 12 years from the beginning of your annuity and if you were to die after 7 years, the rest of your money will go to a dependent for the remaining 5 years of the term.

    If you decide to invest in the Immediate Vesting Personal Pension Plan or the Compulsory Purchase Annuity, the maximum guarantee date that can be chosen is 10 years. Those who purchase one of the above annuities with a Protected Rights pension plan are allowed a guarantee period of 5 years.

    Although the guarantee period is flexible with a Purchased Life Annuity, the last payment must occur before either you or the beneficiary of the money turns 90 years of age. You are not allowed to choose a guarantee period of any length if your Purchased Life Annuity already has a fixed period of between 2 and 20 years.

    Remember, just because a guarantee period plan is certain to make payments until the deadline is up, it does not mean it will give you or a dependent every penny contained within your account. Those who have chosen an inflation linked annuity for example will experience a change in their income every single year. All changes in your income are considered by providers when they are giving you guaranteed payments.

    A guarantee period means your income at the start of the plan will drop depending on how long your guarantee is.

    Capital Protection
    This is an option available to all those who have a Purchased Life Annuity. When you are capital protected, you will be refunded the difference between money you have invested and money that has been paid out to you at the time of your death if a shortfall exists. This windfall will be paid directly to your beneficiaries.