Annuities
Traditional Annuities
Scottish Widows traditional annuities fall into two categories: guaranteed annuities and index-linked annuities.
With our guaranteed annuity, the gross payments are decided at the outset, with your client choosing to receive level payments or payments which increase at a fixed rate each year. If your client chooses to have payments which increase each year, then the payments will start at a lower amount.
The initial payment amount partly depends on the return available from suitable fixed interest securities at the time the annuity is purchased, as well as the options which your client chooses to exercise when purchasing their annuity.
Index-linked annuities provide some protection against inflation, as gross payments are guaranteed to move each year in line with changes in the Retail Price Index (RPI). The initial payment amount partly depends on the return available from index-linked government securities at the time the annuity is purchased, as well as other factors that include the options which your client chooses to exercise when purchasing their annuity.
Alternatively, your client can choose for their annuity to increase by a fixed percentage (of up to 8.5%), rather than by inflation.
As the gross payments are inflation proofed, index linked annuity payments may start considerably lower than a level guaranteed annuity and if the RPI falls, so too may the level of annuity payments depending on the annuity rate chosen.
Unitised Annuities
For the client who would like to see their annuity potentially grow in the future, the Scottish Widows Unitised Annuity may be the answer.
A unitised annuity allows your client's fund to participate in future growth, although the value is not guaranteed and there is the chance that payments from the annuity may fall as well as rise. And, clients can choose from a range of unit-linked funds, tailoring their investment to their own attitude to risk.
Enhanced Annuities
For those clients who find themselves in poor health, an enhanced annuity will give them the ability to increase their income in the years of retirement. It is important that clients whose lifespan may be reduced are provided with an enhanced level of income when it is most needed.
Scottish Widows offers enhanced terms on both a traditional and unitised basis, provided we are notified of the impairment and sufficient medical evidence is provided at the time the annuity is set up.
Some typical example of the illnesses which could qualify for enhanced terms are:
- Stroke
- Heart attack
- Insulin dependent diabetes mellitus
- Multiple sclerosis
- Cancer
- Chronic obstructive pulmonary disease
Further Information about our Retirement Income Products
For further information on Scottish Widows Income Drawdown offering, our Product Comparison and Product Guide (pdf 183k)
pages may prove useful.
