P261 CJEFAX 2 261 Fri 07 Feb 21:14/16 T 1/8 $kj $kj 'k j j5j5*u?j5j5j5 s{ "£££"£££"£££ , . /,. .-.-. .,,./ An annuity provides a regular lifitim income from a lump sum investment. There are tw@ types:@ @ @@ 1/Compulsory Purchase Annuity (CPA) There are bought from pjnsjon funds. Normally pension plans allow you to buy a better annuity from another life ir . is s th Open Ma k Option. 2/Purchased Life Annuity (PLA* PLAt are bought with your own cap sal and provide a v high incom . PAs: M 26 CP— : Fem e 63 Sport 300 Front Page 100 CPA min YourMonjy !ity News Main MenuP261 CJEFAX 2 261 Fri 07 Feb 21:27/04 2/8 U O Annuity rater are calculated with rjgasd to life jxpjctanc@, r@turns on fixed interest investments and life c z xp js R t nc as wi a , and r sj o fall pend ng on t j r turn on the cu nt i ld f om m di at ilks n tie f several options thbt provide protection from early death, such as gubrantee periods and spouse's benefits. A nuitieu can increQse each year as a hedge against inflation. S l ctio o annuity rat 6 -267 Sport 300 Weather 400 Front Page 100 CPA min YourMonjy City News Main MenuP261 CEEFAX 2 261 Fri 07 Feb 21:14/28 Wj£3kj£ski£3k 3/8 Single or Joint Lif Annu ties A single life annuity ceases on the death of the annuitant, but you can choose to have the annuity payments continue to your spouse if you die before him or her. The spouse's annuity can bj cut on the intents death, usually bz 33.3% or 50%. Gubrantei Periods A kite s ca^ bj ubtanteih for a specified period usually 5 or 10 years. Payments will bj made for that period, even if the annuitant dies. CPA Rates: Joint Life 2 4 Sport 300 Weathjt 400 Front Page 100 CPA min YourMoney City News Main MenuP261 CEEFAX 2 261 Fri 07 Feb 21:12/54 C 4/8 Escalating Annuities (EA) Annuities can increase dz a fixed percentage, normally 3% or 5) or in line with the r tail precis index. On average an annuity incteasjng bz 5% compounded a year will give a starting income 30% lower than a level annuity. Normally the EA will overtake the level annuity after about 10 years. Although expensive in the short term, escalation does protect annuity payments from the effects of inflation. Sports news 300 TV/Radio 600 Weather 400 Front Page 100 CPA min YourMoney City News Main MenuP261 CEEFAX 2 261 Fri 07 Feb 21:15/54 5/8 U Erequjncy of Payment Most annuities are quoted monthly. By convention CPAs are quoted in advbnce and PLAt in arrears. Advance: Pa mint is mad at the beginning of the pjtiod. Arrears: At the ind of the pjtiod. Payments can also bj made annu lly, half yearly or quarterly. Annually in arrears will give the highest payment but quarterly in arteats is the most common alternative to monthly payments. Sports News 300 Weathjt 400 TV/Radio 600 Front Page 100 CPA min YourMonjy City News Main MenuP261 CEEFAX 2 261 Fri 07 Fed 21:22/28 6/8 U O]]] T xation Compulsory Purchase Annuities are taxi a ar jd ncom and ar usuall paid net of basic rate tax. Purchased Life Annuities. Each payment includes a repayment as pbtt of the original capital, known as the capital content. This is deducted from the gross annuity before applying your tax rate. Thus PLAt have a significant tax advantage bjcausj tax is pQid only on a small amount of each payment. Annuity Rater pager 262 to 267 Sport 300 Wjathjr 400 Front Page 100 CPA min YourMonjy City News Main MenuP261 CEEFAX 2 261 Fri 07 Feb 21:10/34 7/8 j5j5*u?j5j5j52s{5 Impaired Life Annuities If ou ar in bad health, you ma b able to increase your annuity@bz a ply o m li n ty Two companies, Sun Life and the Pinsjon Friendly Annuit Society, offe bette rates for those with medical conditions such as heart problems and canc r. Stalwatj ssuranci offers higher rates for smokers, tho j with diabetes, igh blood pressure and high cholesterol. CPA Annuity Rbtes: Male 262 CPA Annuity Rates: Female 263 CPA Joe t Life Rbtes 26 Purchased Life Annuities 265 BBC C EFAX FRONT PAGE 1 CPA men YourMonjy City News Main MenuP261 CEJFAX 2 261 Fri 07 Fed 21:10O14 8/8 Wb£££"£££"£££ OOJ[[[^O The annuity tables on pages 262-5 show the top paying companies for a purchase price of £10,000 and £100,000. Higher purchase prices wil\ give a slightly higher rate. R1tes winl also bj affected by exact age and choice of bunefits. Thjtj bri compQnies which offer good rat w ch o y a la to spjcijic groups. These are not quotemN For examplq, The Royal Nationan Pension Fu^d for Nurses. CPA Annuity Rates: Mali 262 CPA Annuity Rates: Frmali 263 CPA Joint Life Rbtis 26) P r as d L f n u t s 265 BBC CJJFAX FRONT P—GE 109 CPA men YourMoney City News Main Menu