Features and benefits

Aims

  • To provide your client with a taxable income for the rest of their life
  • To give your client the choice of taking a tax-free cash sum at the start of the plan in exchange for a smaller taxable income (for immediate vesting personal pensions only)

Eligibility

Your client

  • Has a qualifying medical condition or lifestyle factor
  • Is aged between 55 and 75
  • If including a dependant, the dependant must be aged between 50 and 75
  • Is a UK resident or one of our existing pension customers

Features

  • Income takes into account medical and lifestyle information of both the annuitant and any dependant (if applicable)
  • Single life or joint life
  • Guaranteed period
  • Various payment frequencies: monthly, quarterly, half yearly, annually (paid in advance or arrears)
  • Income paid level, fixed increase or vary in line with RPI

Risks

  • Under current legislation, once it's set up, your client can't cash in their plan or change the basis of their income, even if their circumstances change
  • We may, within six months of your client's annuity being set up, check the health and lifestyle information they supplied in their application. To do this we may ask your client's doctor to complete a report
  • If the answers to the personal, medical and lifestyle questions are inaccurate or incomplete we may reduce their income, or at worst, cancel their policy
  • When your client dies, their income will normally stop. The total amount paid out may be less than the purchase price
  • If your client chooses a pension that doesn't increase, or increases at a rate lower than the future RPI, inflation could reduce what they can buy with their income
  • Your client will receive a lower income during their lifetime if they choose to have an income paid to their dependant after they die
  • If your client chooses an increasing income, their starting income will be lower. If they choose a guaranteed period, their income could be lower.

Minimum Purchase amount

  • £3,750 (after any tax-free cash)

Income options

  • Level income
  • Increase by fixed percentage or  vary in line with RPI

Restrictions

  • Under current legislation, once set up, the client can't cash the plan in, or change the basis of their income

Reporting

  • Annual P60 confirming tax paid and usage of lifetime allowance

Tax

  • Income will be treated as earned income and will be taxable
  • If your client decides to take a cash sum, it's normally tax-free
  • We'll deduct tax from each income payment before it's paid
  • HM Revenue & Customs will notify us of the relevant tax allowances and we'll take these into account in working out how much tax to deduct
  • Tax rules may change in the future

 

Important notice
Please note that charges, terms and limits may change. Tax treatment depends on the individual circumstances of your client and may be subject to change in the future.

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Scottish Widows Limited. Registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655.

Scottish Widows Unit Trust Managers Limited. Registered in England and Wales No. 1629925. Registered Office in the United Kingdom at Charlton Place, Andover, Hampshire SP10 1RE. Tel: 0345 300 2244. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 122129.

HBOS Investment Fund Managers Limited, registered in England number 941082. Registered office in the United Kingdom at Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 119223.

Scottish Widows Bank is a trading name of Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales, no. 2065. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 119278.

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