Purchased Life Annuities

A Purchased Life Annuity is a contract that uses your capital to provide you with a guaranteed gross income throughout your lifetime and for a guaranteed term if you chose to build one in. However, at the end of the selected term or when you die, there will be no return of capital. 

Part of the Purchased Life Annuity is treated as a return of capital and therefore tax free and the balance is taxed at the 20% savings income rate. 

"...individuals on retirement who want to maximise their pension income should use the maximum tax free lump sum to buy a purchased life annuity."

    

The taxation of a purchased life annuity is very favourable compared to compulsory (pension) annuities and it provides a higher income net of tax. This means that the majority of individuals on retirement who want to maximise their pension income should use the maximum tax free lump sum to buy a purchased life annuity.

Immediate Care Purchased Life Annuites can be used to pay for care services. Payments can be made free of income tax, provided they are made direct to a care provider. This is particularly suited to a tax payer as this tax concession means that less of their assets need be used to pay for their care services. 

Once you have brought your annuity you cannot alter it or cash it in.

If you or members of your family are considering purchasing an annuity, please feel free to contact us for personal annuity advice from an Independent Financial Adviser. We are able to provide home appointments across the whole of West Sussex - Brighton, Hove, Haywards Heath & Crawley, East Sussex, Surrey - Croydon Sutton, Reigate, Redhill,  South London - Wimbledon, Fulham, Chelsea and Hammersmith and Central London.