What Is A Variable Annuity? – The Third Way?

 

Third Way plans or variable annuities are an alternative to a life time annuity where you get a guaranteed payment in return for your lump sum and capped drawdown where you keep you fund invested whilst taking an income. These third way products enable those retiring to benefit for some market upside while also being able guarantee part of their income and in some cases providers also guarantee the value of death benefits.

A variable annuity pays an income and allows you to continue to invest in equities , bonds or other assets.  A variable Annuity is an unsecured pension and will usually offer some annual income guarantees (to limit any fall in income) for  fixed period.

These type of annuities are flexible, provide some protection against investment risk and usually have superior death benefits than a conventional annuity. However there are differing levels of protection dependent on the provider, are riskier than a conventional annuity and are more complex due to the structure of the unsecured product.

To make sure that you make the right retirement decisions it is important that you seek independent financial advice. Contact us today.