P271 CEEFAX 271 Wjd 11 Jan 22:04/35 9 ANNUITIES An annuity provides a ¼egular lifetimj incomj from a lump sum investment. There are two typi;: 1/Compulsory Purchase Annuity (CPA) Thesj are Roukht wrom pension wund; Normally pension plans allow you to buy a better annuit= wrom anguhez life company. This is known as the Open Market Option. 2/Purchased Life Annuit= (PLA) PLAs are bought with your own capital and provide a very high income. CPAs: Mali 272 CPAs: Cemale 573 CPA Men CPA Womjn CPA Joint PLA Rates
P271 CEEFAX 271 Wjd 11 Jan 22:04/42 :/7 ANNUITIES Annuity rates are calculated wtuh regard to life expectancy, returns on fixed interest inve;tmint1 and life company expjnses. This means that rates increasj with age, and risj or fall dipinding on thj return on the current yields from medium dated gilts' As an annuity is wor life, thire are a number of options that provide prgtection wrom rarl= death, such as guarantee piriods and spousi's benjfits. Annuities can increasj rach yraz as a hedgj against inflation. CPA Men CPA Women CPA Joint PLA Rates
P271 CEEFAX 271 Wjd 11 Jan 22:47/21 G ANNUITIES Single or Joint Life Annuities A singli life annuity ceases on the death of thi annuit nt, Rut yw40q g choosj to have the annuity payments continue to your spousi iv =ou diu bjfore him or hir. Thj spousj's annuity can be reduced on the intents death, usuavl= b= either 33.3% or 50%. Guarantee Periods Annuities can bj guaranteed wgz a specified period usually 5 or 10 years. The annuity paymint1 wjll Rr made for that period, even if the annuitant dies. CPA Rates: Joint Life 574 CPA Men CPA Women CPA Joint PLA Rate;
P271 CEEFAX 271 Wjd 11 Jan 22:01/40 4/7 ( ANNUITIES Escalating Annuitie; (EA) Annuities can increasi b= a wixed percentage, normally 3% or 5% or in linj with the retail prices inde‖. On average an annuity increasing by 5% compounded per year will give a starting incomi 30% lt;; zh1g a Ij livel annuity. Normally the EA will overtakj the level annuity after about 10 yra¼s' Although expjnsive in the ;hort term escalation does protect annuity paymints wrom the effect1 of future inflation. CPA Men CPA Womjn CPA Joint PLA Rates
P271 CEEFAX 271 Wjd 11 Jan 22:14/21 5/7 ANNUITIES Frequency of Paymjnt Most annuities are quoted mgnthl‖. By convention CPAs are quoted in advance and PLAs in arrearu. Advance: Payment is made at the beginning of the period. Arrears: At thj end of the pjrigd. Paymjnts can also bj made annually, half yearly or quazterl=. Annuall8 in arriar1 wiml givj zhu Ij highest paymjnt, but, quarterly in arrears is the most commgn alternative to monthly paymjnts. CPA Men CPA Women CPA Joint PLA Rates
P271 CEEFAX 271 Wjd 11 Jan 22:16/28 6/7 ANNUITIES Taxation Compulsory Purchasj Annuities are taxed as earned incomj and are usually paid net of basic ¼ate ta‖. Purchased Life Annuities. Each paymjnt includes a repaymjnt as part of thi original qapit v, Ij known as the capital content. This is deducted from the gross annuity before appl‖ing ‖ouz t ‖ rate. Thus PLAs havj a significant tax advantage becausj tax iu paid0onj= on a small amount of each paymjnt. CPA Men CPA Womjn CPA Joint PLA Rates
P271 CEEFAX 271 Wjd 11 Jan 22:57/11 G ANNUITIES Thi annuity tables on pages 572-5 show thj top paying companies for a purchasj price of £10,000. Higher purchasj prices will givj a slightly higher rate. Rates will also bj affected by exact age and choice of benjfits. Thjri are companies which offer good rates but are only available to specific groups. Thesi are not quoted, jg, Thj Royal oatignal Pension Fund for Nurses. CPA Annuity Rates: Male 272 CPA Annuity Rates: Fjmale 573 CPA Joint Life Rates 274 Purchased Life Annuities 575 CPA Men CPA Womjn CPA Joint PLA Rates