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The Guaranteed Pension Annuity from Hodge is designed with simplicity in mind. With competitive rates, it enables your clients to make the most of their money in retirement.
Options could include:
- A choice of monthly, quarterly, half yearly or yearly payment frequencies; in advance or in arrears
- Guarantee payment periods of either 5 or 10 years
- Option to add dependents income of either half, two thirds or full income levels
Hodge offers standard annuity rates only. If you client is in ill-health, smokes or is overweight, they may be able to secure a higher level of income by purchasing an enhanced or impaired annuity from another provider.
Who’s it for?
The Guaranteed Pension Annuity is suitable for clients who:
- Are aged between 55 and 85
- Have pension savings that they want to crystallise equal to at least £10,000 after deduction of any tax-free cash
- Want a guaranteed income for life
- May wish that their spouse or dependant receive an income after their death
- Are a UK resident (excluding Channel Islands and Isle of Man) at time of making an application
The Guaranteed Pension Annuity is not suitable for clients who:
- Have less than £10,000 to invest after taking their tax-free cash
- Require a guaranteed income from non-pension savings
- Want to make regular or one-off contributions
- Want to withdraw amounts from their pension pot as and when they choose
- Want flexibility to change any of the options initially chosen
There are risks to your client, which are:
- The policy has no cash in value at any time. If your client dies in the early years of the policy, unless they have chosen a dependant’s annuity and/or a guaranteed payment period they will get back much less than what they paid for their annuity
- The income from the annuity will not go up, so inflation or any increases in income tax in future years will reduce the buying power of the annuity
- The health of your client or their dependant(s) is not taken into account when setting the annuity rate. If your client or the dependant smoke or have a medical or health problem they may be eligible for more income from another provider
- Your client’s pension funds could reduce in value before Hodge receives them. If they go up, your client may get a higher income. If they go down, your client may get less
- Once the annuity has been purchased and the cancellation period has ended, even if your client’s circumstances change, they will no longer have access to the funds paid to Hodge. This means your client won’t be able to:
- Cash it in or get a refund
- Pay it back into their original pension plan or scheme
- Switch to a different annuity provider
- Alter or remove any of their chosen annuity options
The Hodge Annuity
A simple approach to pension annuities.
To identify if your client is eligible for an annuity from Hodge Lifetime, please read on.
Applicants must be aged between 55 – 85, and be resident in the UK. Income from the annuity will be paid directly into a UK bank account.
We accept annuity premiums between £10,000 and £350,000. Up to six pension policies/funds can be combined into the annuity.
Income: Level only. We do not offer a retirement income that increases year on year.
Payment frequency: Income can be paid monthly, quarterly, six-monthly or annually. Income can be paid at the start or end of each period.
Dependent’s pension: The annuity can provide an income for a spouse or partner after the annuity holder’s death. This can be 50%, 66% or 100% of the annuity holder’s income.
Guaranteed period: Guarantees can be 5 or 10 years. Hodge will continue to pay the annuity income for the guaranteed period even if the annuity holder dies before it expires.
Hodge Lifetime offers standard annuity rates only
If your client is in ill-health, smokes or is overweight, they may be able to secure a higher level of income by purchasing an enhanced or impaired annuity from another provider.
The Open Market Option
It pays to shop around.
Your client is not obliged to purchase an annuity from their pension provider.
The annuities offered by your client’s pension provider may not be the best available. Pension savings can be transferred to a different insurance company to provide the annuity – this is called “exercising the open market option”.
Everyone nearing retirement is encouraged to shop around before buying an annuity. This could increase your clients’retirement income by a significant amount.
We offer our annuity under the Open Market Option. This means that our annuity rates are competitive. You can compare our annuity rates with those of our competitors for your clients.
Exercising the Open Market Option is straightforward. You can complete the application paperwork with your client and send that to us. Once we’ve had the application, we undertake the work to transfer the pension funds to us so that we can provide the annuity.
You can understand more about our application process here.
What is a pension annuity?
A pension annuity enables pension savings to be converted into an income in retirement which will continue for the rest of the annuity holder’s life. Annuities can be bought with monies saved in money purchase or similar pension schemes. Please note if your client has a final salary pension or similar, the scheme will usually pay an income directly from the pension scheme. An annuity cannot be bought with a final salary pension scheme.
Does my client need to retire before buying an annuity?
No. An annuity can be bought at any time provided that the annuity holder meets the age eligibility criteria.
Can my client buy an annuity without using an adviser or broker?
Yes, but not from Hodge Lifetime. We’re committed to ensuring that customers are aware of their options and they have compared the annuity rates available in the market. We prefer that everyone uses the help of an adviser or broker. Some providers will allow annuities to be bought directly.
How long does the process take?
This mainly depends on your client’s pension provider. Assuming we receive the pension funds within two weeks, the whole process should be completed within a month.
Can an annuity be cancelled?
An annuity is intended to be a commitment for the rest of the policy holders’ life. The Hodge Lifetime annuity has a 30-day period during which the policy can be cancelled if your client changes their mind. After 30 days from the date the application is signed, the cancellation period expires and the policy cannot be reversed.
What is the benefit of including a guarantee period?
A guarantee period ensures that the annuity will continue to be paid even in the event of death in the early years. The guaranteed amount will continue to be paid to a dependent or estate.
How is annuity income calculated?
Annuity income is determined based on life expectancy and long-term interest rates prevailing at the time the annuity is purchased.