Tax free cash sum required
the amount of your “pot” you want to take as a tax free lump sum. Maximum 25%.
You can choose an annuity which goes up every year. This increase can be by a fixed amount or in line with inflation. Inflation can be measured by either RPI (Retail Price Index) or CPI (Consumer Price Index).
Single or Joint Life
With some annuities you can choose to add your partner. Joint life annuities are more expensive than single life so if you choose a joint life annuity you will get a lower income than you would from a single life annuity.
For an Open Market Option annuity the term will be For Life.
this is the period you can have income payments guaranteed for after you start the annuity. You can choose 0, 5 or 10 Years. You might choose to have your payments guaranteed if you are concerned about your health and life expectancy. The longer the guranteed period, the lower the income.
This is how often you want the income paid. Generally this can be monthly, quarterly, half yearly or yearly. Income can be paid in advance (ie at the start of the period) or in arrears (ie at the end of the period). For example, if you choose “monthly in arrears” the first income payment would be one month after you bought the annuity. Make sure you choose the most appropriate method for you because it makes a difference to how much you get. For example the income for a monthly in arrear annuity will be lower than a yearly in arrear annuity.
No annuity income allowance is offered for the proportion of the month in which you die.
In the event of the annuitant’s death (before age 75), value protection will return the original amount used to buy the annuity, less all annuity payments. Tax at 55% is also deducted from this amount. You can protect any part of the pension fund up to 100%.
If you haven’t yet reached your retirement date you may need to adjust your date of birth on the input screen to trick the tool into giving you the figures.