Income for Life questions

What type of guarantees does Income for Life offer?

Until the person reaches age 75, it’s an unsecured pension (USP) plan with a guaranteed income. The percentage depends on the client’s age when they first take income from the plan and whether they’ve chosen a joint life or single-life plan. Typically, it’s from 4% and 4.5% from age 55.

When they reach 75, they can choose to still receive the guaranteed income and move to an Income for Life Annuity or Income for Life alternatively secured pension (ASP), or they can give up the guaranteed income and move into a conventional annuity or ASP. Your clients can also decide to take their guaranteed income from an Income for Life Annuity at any time.

Can the income rise or fall?

The future income and income escalator features mean that if the market rises and the plan value goes up, the guaranteed income amount could go up too.

The guaranteed income won’t fall simply because of poor investment return. However, there are circumstances where it could reduce, for example, if your clients take more than the guaranteed amount in one plan year or a pension sharing order is made against their plan.

Their income could be restricted as it must be within the limits set by the Government Actuary’s Department (GAD). You can find out more about the restrictions and circumstances by looking at the Income for Life Financial adviser guide.

What fund choice is available?

There are two different investment approaches, and you can mix these to suit your preferred way of giving advice and your clients’ needs.

• Core portfolios - aimed at investors who prefer a simple investment approach, these four portfolios are a mixture of the UK Fixed Interest fund and the UK Index Tracker fund
• Multi-manager portfolios - a mixture of equities selected by Morningstar from our pension fund range and the UK Fixed Interest fund
• the Income for Life cash fund