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Fixed-Term Annuity.

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Fixed-Term Annuity.

A fixed-term annuity provides you with an income for a guaranteed period in retirement.

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How it works

Not everybody knows what their retirement will hold. Tying yourself into a lifetime annuity could be the wrong decision further down the line. Circumstances change throughout your life. A fixed-term annuity gets you a set income for a guaranteed period, so you can reassess your needs later.

Once the fixed-term ends you’ll have a better idea of what you need from your pension income. At this point you’ll receive your ‘maturity amount’. This is your pension fund that stayed invested during the term. You can use this to purchase a different annuity or take advantage of alternative income products.

With a conventional annuity payments stop when you die. This could happen just a few years into your retirement, with all of your pension fund being lost. If you die during a fixed-term period the annuity will keep paying out to a beneficiary. This could be a spouse, dependant or other relative. They’ll also receive your maturity amount at the end of the period, so you know they’ll be taken care of.

Benefits of a Fixed-Term Annuity are:

  • Provides a known and secure level of income, so you can budget more effectively
  • You’re not tied in for life if your circumstances and financial needs change
  • Ensures an income for your partner should you die

What’s the catch?

The main downside to a fixed-term annuity is that they tend to offer lower income rates. But if you're younger the difference is usually fairly minimal. Also, If market conditions change it could mean the maturity amount you receive at the end of the fixed term period isn’t enough to provide you with the retirement income you need.

Get a live annuity quote with us and you’ll know exactly what income to expect in less than five minutes.

Want to see how much more you could have in retirement?