Retirement
Fixed Term Income Plan
A known income for a chosen term and a known maturity value at the end of it, leaving the member free to decide again later rather than committing for life at one moment in the market.
Ladies View, Co. Kerry · Marco Ober, CC BY-SA 4.0
Who it is for
Individuals bridging to state pension age or deferring a lifetime decision
What it does
- Terms from 3 to 25 years
- Guaranteed maturity value quoted at outset
- Death benefit of the remaining guaranteed payments plus maturity value
- No investment decisions during the term
The product in full
The Fixed Term Income Plan answers a narrow but common problem: the member needs income now, and does not want to make a lifetime decision at this particular moment. It pays a known income for a chosen term — three to twenty-five years — and returns a known maturity value at the end, at which point the member decides again with whatever the market and their own circumstances then look like.
Both figures are quoted at outset and neither depends on investment performance. There is nothing to review, no fund to select and no annual statement to interpret. That is unusual enough to be worth stating plainly: the plan is a pair of promises with a date on them.
The commonest use is bridging. A member retiring at 62 who reaches state pension age at 67 has a five-year hole to fill and no reason to buy a lifetime annuity to fill it. A five-year plan covers the gap and hands back a maturity value at the moment the state pension starts, when the remaining decision is smaller and better informed.
Literature
Product literature is issued to appointed intermediaries. Ask your underwriter, or request it through the enquiry form.
- Key features documentOn request
- Illustration requestOn request
How it works
What happens, in order
From the first enquiry to the point the cover, the contract or the facility is in place.
A term and an income are chosen
From three to twenty-five years. Income can be level or escalating, and the maturity value moves inversely with the income taken.
Both figures are guaranteed at outset
The income and the maturity value are quoted before the member commits, and neither changes during the term.
Income is paid for the term
With no investment decisions, no reviews and nothing to monitor.
The maturity value is paid at the end
And the member decides again: a lifetime annuity, drawdown, another fixed term, or something else entirely.
The numbers
A worked example
Illustrative arithmetic, so the shape of the product is visible rather than described. Nothing here is a quotation or a projection.
Bridging five years to state pension age
A £120,000 pot from a member retiring at 62, on illustrative terms.
- Pot applied
- £120,000
- TermFrom age 62 to state pension age at 67
- 5 years
- Income, level
- £9,600 a year
- Total income over the term
- £48,000
- Guaranteed maturity value at year 5
- £82,000
- Total returned across the planIncome plus maturity value, on illustrative terms
- £130,000
- Decision at maturity
- Open
Illustrative and not a quotation. Income and maturity value are quoted together and trade off against each other: a higher income buys a lower maturity value from the same pot. Death during the term pays the remaining guaranteed instalments plus the maturity value.
How income and maturity value trade off
The same £120,000 pot over five years, at three illustrative income levels.
View these figures as a table
| Income paid over the term | Maturity value at year 5 | |
|---|---|---|
| £7,200 a year — Lowest income, largest maturity value | £36k | £95k |
| £9,600 a year | £48k | £82k |
| £12,000 a year — Highest income, smallest maturity value | £60k | £69k |
Suitability
Where the Fixed Term Income Plan fits
The cases it answers, the cases it does not, and what an underwriter needs before quoting.
It is the right answer when
- Bridging a defined gap — early retirement to state pension age, or to a known event.
- A member who does not want to commit to a lifetime basis in the current rate environment.
- Someone who wants no investment decisions at all for a period.
Look at something else when
- A member who needs income for life and will not want to decide again — that is the lifetime annuity.
- Someone who wants market exposure during the term.
- Terms under three years.
What we need to quote
- 1.Date of birth, the pot available and the ceding scheme details.
- 2.The term, and whether income should be level or escalating.
- 3.The income required, or the maturity value wanted — we quote the other.
Questions
What brokers ask us about this product
What happens if the member dies during the term?
The plan pays the remaining guaranteed instalments together with the maturity value. It does not simply stop, which is the difference between this and an annuity without a guarantee period.
Is the maturity value guaranteed even if markets fall?
Yes. Both the income and the maturity value are contractual amounts quoted at outset, and they do not depend on investment performance.
Can the term be ended early?
The plan is written for its term. Ask us before setting it up if there is a realistic chance the member will need to break it, because the answer belongs in the design rather than in a later negotiation.
Request information
Ask us about the Fixed Term Income Plan
The form reaches an underwriter in Dublin. If you are an intermediary, say so and we will route it to the broker desk.