WHAT IS A PENSION ANNUITY?

A pension annuity is simply a way to convert your pension fund into income for the rest of your life. You have the choice of taking any tax free cash you are entitled to before the annuity is set up.

The income you receive for each £1,000 converted will be greater the older you are and will depend on interest rates at the time you start the annuity.

The income payment is determined at outset and guaranteed throughout your lifetime. The annuity can be for a level amount or it may increase each year e.g. by 5%. Your income will be paid regularly direct into your bank account.

ENHANCED PENSION FOR SMOKERS

We believe in giving you the full benefit of your pension fund, taking account of your personal circumstances. Because you smoke at least ten cigarettes a day (or 85 gms of rolling tobacco per week) and have done so for at least the last ten years this has an effect on your life expectancy. We take this into account to give you a bigger annuity.

We carry out spot checks and in some cases obtain doctors reports to verify the smoking information you provide in your application. If we find evidence that does not support the information you have supplied and you are not eligible for smoker annuity rates your pension will be reduced.  The reduction will be significant and your pension will be less than you could have received from another company. We will also recover any overpayments.

OPTIONS

A Reliance Mutual annuity can be set up to suit your personal circumstances.

Joint Life - The annuity may be arranged on the joint lives of you and your partner, payable whilst either of you is alive.

Guaranteed Period irrespective of Survival - The annuity payments are guaranteed throughout your lifetime. You can build in a further guarantee so that, should you die early, the payments will continue for the balance of a fixed period, say 5 or 10 years. Any payments remaining after your death will be paid to your beneficiaries. If you included a pension payable to your partner on your death it may be possible for this to start immediately, even while the balance of your own pension is being paid. This is known as with overlap.

Frequency of Payment - You may have your annuity paid monthly, quarterly, half-yearly or yearly, either in advance (with the first payment commencing immediately) or in arrears (with the first payment commencing at the end of the frequency chosen).

If you choose an annuity in arrears, it can be paid with or without proportion. For example, you may decide on with proportion, especially if it is payable annually, so that when you die a proportionate amount is paid for the period from the last payment to your death.

THE TAX POSITION

Your pension is subject to tax in the same way as earned income. We will deduct the tax under the PAYE system and pay you the net amount.

HOW DO I APPLY?

To be eligible you must be a UK resident and meet our smoking criteria.

All you need to do is fill in the application form which requires some information about you and the annuity you would like, in consultation with your financial adviser. A further form needs to be completed by your pension provider or Trustee which you will need to authorise.

Once your application is accepted we will send your annuity policy document to you, and start payment direct to your bank account.

CANCELLATION RIGHTS

Once you have received your first illustration from Reliance Mutual you will have 30 days in which to think about whether you want to proceed. We will not start processing your application if it is received within this 30 day period, so that you have time to decide.

Once your annuity is set up you will not be able to change your mind.

FINANCIAL SERVICES COMPENSATION SCHEME

Reliance Mutual has always met its annuity commitments. In the unlikely event of us not being able to do so in the future, your interests will be protected by the Financial Services Compensation Scheme (FSCS). There are maximum levels of compensation you can receive under the Scheme. You will normally be covered for at least 90% of payments due under your annuity. For further information you can contact the FSCS helpline on 020 7892 7300 or visit their website at www.fscs.org.uk.