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With Profits Annuity from Annuities4U the UK’s leading With-Profit annuities specialists.
A With Profits Annuity links your income directly to the performance of the insurance company’s with profits fund.
The idea is to give some indexation to the with profits annuity so it can increase over the years.
The actuaries looking after With-Profits annuities operate a smoothing process, to try to prevent any falls in income from happening. Smoothing is when the actuaries would hold back some of the money on good years to compensate for bad years therefore providing a balanced income for the annuitant.
If you choose a low anticipated bonus rate (ABR), your starting income is low, but this may allow you to have a better income in future if the bonuses exceed the chosen ABR. However if you choose a high ABR and in the future the bonus rates falls this may cause your income to fall.
A With Profits annuity may have higher initial charges as well as other charges, which may mean a reduction in your overall income.
If you would like to discuss with-profits annuities in more detail please complete our online enquiry form or call us direct on 0845 676 1010.
