Selecting a guarantee period
Helping clients protect the value of their pension
It may not be of concern, but should your client wish to, they can incorporate a guarantee period to ensure that income will continue to be paid until the end of the guarantee period selected – up to 30 years from their first payment.
See below for an overview of how this option can work.
Points to consider
- Your client can choose a guarantee period between one and thirty years.
- There is a cost associated with this choice – the longer the guarantee period, the lower the annual income the client receives will be.
- If they live past the guarantee period, then their income continues, but in the event of their death, the income will just stop (if no other options have been chosen).
- Where an individual under the age of 75 dies and has a guarantee period, any payments made to beneficiaries will be tax-free. If they die after the age of 75, the income will be taxed at the beneficiaries’ marginal rate of tax.