Angela is 60 and wants to give up work so she can spend more time with her grandchildren, but she is waiting for her state pension to kick-in when she turns 67.
Angela's got £160,000 in a Self-Invested Personal Pension (SIPP) which she wants to use to maximise her income until she gets her state pension.
So, Angela’s adviser recommends she invests £120,000 into a Prudential Guaranteed Income Plan while taking £40,000 tax-free cash now. Her plan will pay her a guaranteed income of £19,958 each year until she turns 67. Giving her £139,706 over the seven years – totally guaranteed.
Maximum income option, £120,000 investment, 7 year term |
||||||||
|---|---|---|---|---|---|---|---|---|
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Total | |
| Guaranteed income | £19,958 | £19,958 | £19,958 | £19,958 | £19,958 | £19,958 | £19,958 | £139,706 |
| Bonus (not guaranteed) | 0 | £38 | £77 | £115 | £154 | £193 | £231 | £808 |
In this scenario, Angela receives £140,514 back from her investment in the Prudential Guaranteed Income Plan.
This plan gives your clients a guaranteed return, but if the plan’s investments do better than the guaranteed return, the extra return gets added on.
If you want to see a different example of how this option might work, download the client guide.
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