Non Profit pension annuity - The basics

• You can buy our Non Profit Pension Annuity with the proceeds of any registered UK pension scheme, subject to a minimum premium.
• A Non Profit Pension Annuity will provide you with a guaranteed regular income for life.
• You are normally eligible for this type of annuity as long as you're aged between 50 and 75. The minimum age will be increased to 55 on 6 April 2010. You can find out about other eligibility criteria here.
• We offer you a range of payment options so that you can choose those that suit you.
• Annuities are complex products and it is always advisable to seek financial advice about your options before purchasing one. Please view the risks associated with this product.

Your options

There are a number of payment options available:

1. Level Income This will pay you the same amount of income for the rest of your life. The gross amount will never change and so will not allow for the effects of inflation. What you can buy with this amount is therefore likely to fall over time.
2. Increasing Income This pays you an income that increases every year. You can either choose a fixed yearly increase or link your income to the cost of living through the Retail Prices Index. Whichever you choose, at outset your income will be less than if you had chosen a level income, but this option can help to maintain a standard of living over the longer term.
3. Guarantee Period You can guarantee that your income is paid for a minimum period even if you die.
4. Spouse's or Civil Partner’s Pension You can make provision for your spouse or registered civil partner by building in a spouse’s or civil partner’s pension, which can be payable immediately on your death or after any guarantee period has ended.
5. Dependant's Pension This allows you to provide for your surviving partner if you are unmarried, or not in a civil partnership.
6. Payment Frequency You can choose to have your income paid to you every month, every three months (quarterly), every six months (half yearly) or once a year (annually). Payments will be made either in advance (at the start of the payment period) or in arrears (at the end of the payment period).

When you buy your annuity, the amount of income you will receive will depend on a number of factors, including:

• the size of your pension fund
• the prevailing investment market conditions
• your age and sex
• your postcode
• the options you choose.

Examples of payment options

The table below shows how your options could affect your income. The figures are based on a married man aged 65 exactly with a wife aged 62. The first line shows a monthly income of £1,000 payable in arrears. The lines that follow give an indication of the impact of choosing the various options.

RPI = Income linked to the Retail Prices Index (inflation).

Source: Legal & General January 2008.

The figures given in the table are for illustration only and may change at any time.

The charges

We will apply a charge to meet our expenses for administration, investment management and, where applicable, any commission we pay to your financial adviser.

In the case of Non Profit Pension Annuities, the charge will be taken into account when calculating your annuity rate. It will not affect your future income payments.

Risk factors

Annuities are complex products and it is always advisable to seek financial advice about your options before purchasing one. Also bear in mind that:

• Annuity rates change all the time, so any quotes you get are likely to only be valid for a short period.
• Once you have bought your annuity you cannot cash it in or switch it to another provider.
• Your circumstances might change after you take your benefits. For example if you get married or enter into a civil partnership after you buy your annuity, you cannot add a spouse’s or civil partner’s pension option.
• The total payment which we make could amount to less than the sum used to purchase the annuity.

The Financial Services Authority (FSA) is the regulator for the insurance industry. Its website contains FSA comparative tables which you can use to compare annuity rates offered by different annuity providers.

If you have an Independent Financial Adviser (IFA), you should contact them to discuss your needs. If you don't have an adviser and want to get in touch with one local to you, then go to Get advice.