Immediate Life Annuity

An Immediate Life Annuity is a retirement income plan that can be bought with your own money from non-pension sources. It can be bought with savings, investments, inheritance or the tax free cash lump sum from a pension fund. This annuity can provide you with a tax efficient, additional income from the age of 55. It provides you with a guaranteed income for the rest of your life and can be seen as a low risk choice.

What are the benefits?

• Guaranteed income. It promises to pay you a regular income for life, so it's a low risk option.
• Income choice. You can receive your income monthly, quarterly, half-yearly or annually. Payments can be 'in advance' (from the start date), or 'in arrears' (at your chosen payment interval after the start date).
• Tax Advantages. HM Revenue & Customs may agree that part of your payment is a return of capital and therefore not subject to tax. Any statements relating to tax are based on our understanding of current tax law, which may change in the future. Tax treatment will depend on your personal circumstances - a Financial Adviser will be able provide you with more information about your tax position.
• No surprise charges. We take our charges into account when we work out the price of your initial annuity.

Things to think about

• Depending on how long you live you may get back less than you bought your annuity for.
• No cash-in value. Once you've bought an annuity it cannot be cashed in at any time.
• You can take out an annuity that stops whenever you die. Or, alternatively, you can choose an annuity with a smaller income but which is guaranteed to be paid for at least either five or ten years, even if you die during this time. This is called the 'guarantee period'. If you live longer than the guarantee period, the annuity will continue to pay an income for the rest of your life.
• Changing your plan. The options you choose at the start of your plan can't be changed.

Your options

You can:

• Buy an Immediate Life Annuity with a personal sum of at least £7,500 from savings, investments, an inheritance or tax-free cash lump sum from a pension fund.
• Buy an Immediate Life Annuity with a minimum sum of £100,000 if it is purchased by the trustees of a will or settlement.
• Choose whether you receive the same amount each year, or your payments increase by a fixed percentage between 0% and 5%.
• Choose from a number of options which determine the level of regular income you will receive. Read more about the different options.

How to apply

If our Immediate Life Annuity seems right for you, or for further advice, talk to an Aviva adviser by calling 0800 068 3038^*. We can only advise on our own products. If you have an Independant Financial Adviser please contact them.

Read the key features of an Immediate Life Annuity (PDF 91KB)

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WC01035 01/2012