Questions and answers

What is an ‘enhanced annuity’ and who would qualify for one?

It is a pension annuity that pays out a higher than normal income because the applicant's or 'annuitant’s' health is impaired or they are a regular smoker.

Impaired means anyone with a health condition that’s expected to reduce their life expectancy. We are also able to offer enhanced rates to a healthy main annuitant whose partner has a health condition or smokes. Health conditions range from relatively minor conditions like hypertension, through to more major ones such as heart failure and cancer.

How much extra could I receive?

Health conditions

Because each case is different we’re unable to state an exact amount. It depends on your (and your partner’s) health condition, your age, gender and the amount of income that you wish to receive. As a rule, people with more serious health conditions will receive a greater amount than those with more minor ones.

Smokers

If you don’t have a health condition but are a smoker, you could also qualify for enhanced rates on our pension annuity. Even if you don’t smoke but your partner does, you may still benefit if you are making a joint application.

What is the Open Market Option (OMO)?

At retirement, most people with a private pension must use some or all of their fund to buy an annuity. The annuity provides your retirement income. The Open Market Option gives you the right to take your pension fund and invest it with another provider who may provide you with a higher income.

Why should I exercise my OMO?

When you retire, you will only have one opportunity to decide who provides your pension annuity. Once you have selected your provider you won’t be able to transfer your annuity to a different provider in the future, so it makes good financial sense to shop around for the best possible rates, as they will usually be fixed for the rest of your life. If you can get a better deal elsewhere, you can transfer the pension fund you have built up using your Open Market Option. It’s estimated that £1.25 billion is lost each year because people don’t take advantage of their OMO, so it’s certainly worth speaking to your Financial Adviser before making any decisions.

Do you pay Pension Commencement Lump Sum?

It’s your pension provider’s responsibility to provide Pension Commencement Lump Sum. If however, they are unable to do so, you will be able to use our Personal Pension Transfer Plan (PPTP). The PPTP is only available in the UK – we are unable to provide this product to clients based on the Isle of Man or the Channel Islands.

Can Guaranteed Periods be combined with Value Protection?

No. Only one or the other can be selected because Value Protection is an option that reduces in line with payments received for a specific period of time, whereas guaranteed periods are selected at outset and run for the duration selected.

How do I apply?

You should speak to your Financial Adviser in the first instance. If you do not have an adviser, click here for our guidance on how to find one.

Financial Advisers can visit the Adviser Section of the website here for further information and to download application forms.

We will always keep advisers updated of the progress of applications they submit for their clients – in our experience, working together with advisers ensures cases progress in the quickest possible way. To help advisers keep track of their cases we offer a Case Tracking system, advisers can click here for more information.

What are the standard commission rates for advisers?

Pension Annuities - 2.25%
Purchase Life Annuities - 3%

Fee based commission is also available but only on the Pension Annuity and the maximum amount has been set at 10% or £600 whichever is lower. (For Retirement Annuities above a purchase price of £26,667 the standard level of commission at 2.25% provides a commission of £600 or more.)