Benefits of the Living Time Income Plan

• Keeps client options open for longer and gives greater flexibility
  the clients can reassess their needs at the end of the chosen term
  
  
• No investment performance risk
  the clients know exactly what they will get back at the end of the chosen term
  
  
• A competitive rate of fixed-term income
  comparable to the 'best in market' lifetime annuity providers
  
  
• Clients can choose an income at outset from £nil to 120% of GAD
  giving them the flexibility to tailor the Plan to their income needs

The Living Time Income Plan would suit these clients because…

They can elect to set up a five year Plan on a ‘nil income’ basis as they do not need an income straight away.  This will increase the amount of GMA payable at the end of the term and also provides a secure, guaranteed home for their pension fund.  After five years they could reinvest in another Living Time Plan once they have reassessed their income needs.

Mr Davis could build in added death benefits for his wife, such as Value Protection, which would return the initial investment less income paid (if any) if he died within the term of the Plan.  Mrs Davis could then reinvest this in an appropriate pension product (subject to an additional tax charge, currently 35%) to provide her with an income if required.

Tax treatment depends on individual circumstances and may be subject to change.

The Living Time Income Plan would not suit these clients if…

• they wanted to benefit from on-going exposure to stockmarkets to potentially boost the value of their pension fund, or;
• they are not prepared to lock away their pension fund for five years as they would not be able to withdraw their funds or change the Plan benefits once the Plan is set up.
  
• they are not UK residents - click here for details »

Points to bear in mind

• Future income
  Annuity rates may be lower in the future.
  
  The income that the Guaranteed Maturity Amount (GMA) can buy at the maturity date is not guaranteed. It may be higher or lower than the amount a Lifetime Annuity would pay if purchased now.
  
  The higher the income level the client selects at the outset of their Plan, the lower the Guaranteed Maturity Amount at the end of the Plan term, which in turn will reduce the future level of income the client can obtain.
  
  
• Death benefits
  If the client does not select at least one of the death benefit options under the Plan and they die during its term, no further Plan benefits will be paid, i.e. their remaining pension fund will be lost.
  
  
• Income levels
  The client's chosen income may be restricted throughout the term of their Plan by limits set by the Goverment Actuary's Department (GAD).  Any income that cannot be paid because of a restriction will be added to the GMA, plus interest at a gilt rate determined by Alico.
  
  
• Inflation
  Inflation will reduce what the client can buy with their income in the future.
  
  
• No withdrawal or changes
  Once we have received the client's application for a Living Time Income Plan they will have 30 days to change their mind. After that, their funds cannot be moved or their benefits changed until the end of their chosen term.

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