(PRWEB UK) 8 August 2012
More and more retirees are turning to fixed-term annuities as they look to combine income certainty with financial adjustability according to Just Retirement.
Just Retirement who provide annuity quotes for companies such as My Pension Expert were established in 2004 and is marking the anniversary of launching its own innovative FTA to the market by reporting a positive start, with applications for the company’s scheme rising over 35%.
Groups director of External Affairs and Customer insight, Stephen Lowe at Just Retirement explained that while FTA’s have been around for some time, it is only within the last year that they have “become established as on of the 4 options for retirement income” alongside lifetime, drawdown and asset backed annuities.
Fixed-term annuities, unlike conventional lifetime annuities, offer more financial freedom for retirees by allowing clients to avoid entering and being stuck in lifetime annuity returns. FTA’s do this by paying an income for an agreed term, then once matured returns a guaranteed lump sum which can be used to buy another retirement plan.
Flexibility is the key buzzword when it comes to fixed-term annuities and the market is expected to continue to grow with FTA’s being increasingly discussed as part of a full range of alternatives for retirees.
Stephen Lowe described the flexibility of fixed-term annuities being a ‘key motivator’ with FTA’s often being part of a wider pension plan.
Fixed-term annuities can appeal to would-be lifetime annuity buyers who don’t want to lock into today’s low rates, while FTA’s offer benefits to drawdown clients who are worried about investment risks.
Yet health more than anything remains a major factor for those planning their retirement income strategies.
Just Retirement recognised this by pioneering an option which allows those diagnosed with health issues to exit during the term and allowing people to switch to an enhanced annuity. The company’s Plan Protection scheme is chosen 95% of time; the plan looks to give the option of exiting a payment scheme in the event of ill health and guards the value of a scheme in the event of poor health or premature death.
Those who are fortunate enough to be in good health by the time they reach 65 will often not qualify for an enhanced annuity. Enhanced annuity rates have a tendency to be available only when close to the point of diagnosis. This further underlines the importance of a conversion feature and the availability of an adaptable scheme which incorporates individual circumstances alongside the factor of change.
My Pension Expert is a company of Diploma Qualified Independent Financial Advisors who specialise in the at retirement market.