With-Profits Pension Annuity Key Features

Key Features of the With-Profits Annuity

ITS AIMS

• To pay you a pension for the rest of your life
• To pay a pension to a dependant when you die, if you choose.
• To reflect our investment performance in your future pension.

YOUR COMMITMENT

• To use your pension fund to buy a pension from us to last the rest of your life.

RISK FACTORS

• Your pension will change each year. It will depend on the Anticipated Bonus Rate you choose and the actual bonuses we add each year. Your pension can go down as well as up.
• The higher the Anticipated Bonus Rate you choose, the greater the risk that your pension will go down. Your pension could fall, possibly below the starting level.
• What you get back is not guaranteed. It may be lower than illustrated if:
• our investment performance is lower than illustrated
• our charges increase
• with-profits annuity planholders generally live longer than we expected at the start of their plan.
• You can’t change or cash in your pension, even if your personal circumstances change.
• If you die in the initial years, the total pension payments you’ve received may be less than the original payment made to buy the pension.
• Your dependant won't have any income from this plan after you die if you haven't arranged for your pension to continue.
• Remember inflation will reduce what your money can buy in the future.

QUESTIONS & ANSWERS

WHAT IS THE WITH PROFITS PENSION ANNUITY?

• It’s a plan that provides you with an income for life. You buy it with your pension fund.
• You may be able to take a tax-free cash sum of up to 25% of your pension fund when you buy your With- Profits Pension Annuity. Your financial adviser will be able to to give you more details.
• The minimum fund to buy your pension is £20,000 (after taking any tax-free cash sum).
• It can provide a dependant with a pension when you die.
• We invest your pension fund in our With-Profit Fund. Your pension will change each year depending upon the bonuses we add.
• You choose an Anticipated Bonus Rate within a range of 0 to 4% in 0.25% steps. This will set your initial pension. A higher rate will give you a higher initial pension but increases the risk that your pension may go down in the future.

How flexible is it?

• Before your plan is set up, you can choose its basis and how it's paid.
• You can find details of the choices you can make when setting up the plan, under the headings:
• "What will my pension be?"
• "What choices will I have about how I get my pension?"
• At any time after the first year you can:
• change the Anticipated Bonus Rate within our limits at the time. We'll recalculate your pension.
• convert your plan to a conventional annuity so that your future payments are known. We'll recalculate your pension.
• You can't make other changes or cash in your plan.

What will my pension be?

• The amount of pension you get will depend on a number of things, including:
• your age and sex
• the choices you make about your pension - see below
• the Anticipated Bonus Rate you choose
• our With-Profit Fund investment performance
• our charges.
• Your pension will change each year – up or down. The new pension will depend on your chosen Anticipated Bonus Rate and the actual bonuses we add.
• The lower the Anticipated Bonus Rate, the greater the potential that your pension will increase in the future.
• We guarantee that your pension will never fall below a minimum amount. This is the pension you could have bought at the start of the plan based upon an Anticipated Bonus Rate of 0%.
• Your illustration gives an idea of the pension you might get.
• You can choose to take a smaller pension at the start, so that a pension is paid to a dependant if you die before them.
• You can choose to take a smaller pension that is guaranteed for up to ten years even if you die during that time. This is called the "guaranteed period".
• You can choose combinations of these options. You can ask for illustrations with different benefits so that you can see the difference they would make to you.
• If you are taking a With-Profits Pension Annuity using the pension fund belonging to your husband, wife, civil partner or person you were dependent on following their death:
• a pension for your dependants is not available
• a guaranteed period of pension is not available
• While you're alive we won't stop the payments.

How will my fund be invested?

• We invest your pension fund in the Aviva Life and Pensions Limited With-Profit Fund.
• The With-Profit Fund is invested in a mix of assets, consisting of:
• company shares (stock market investments)
• property
• Government bonds (loans to the Government)
• deposits
• You can find more details about how the With-Profit Fund works in the "Guide to With-Profits Pension Annuity Investment" booklet and the Customer Friendly Principles & Practices of Financial Management.

What choices will I have about how I get my pension?

• You can choose how often you'll receive your pension. This can be monthly or yearly.
• You can choose whether the payment is made at the beginning or end of the frequency period. This is known as "in advance" or "in arrears".
• These choices will affect the amount of pension you’ll get.
• We will pay your pension directly into your bank or building society account.

What happens to my pension when I die?

• Your pension will end when you die unless:
• you have chosen a pension with a guaranteed period. If you die within that time, we'll pay the remaining payments to your estate.
• a pension is to be paid to a dependant and they are still alive.

What are the charges?

• We use the fund to pay our charges for setting up and running your plan. We do this by taking these charges into account when we work out the price of your initial pension and when we decide the bonuses to add to your pension each year.
• Your illustration shows our charges and the effect they may have on your pension over time.

What about tax?

• Your pension will be treated as earned income and taxed according to your personal circumstances.
• Your pension payments will normally be made after the tax payable has been deducted.
• Any payments made to your or your dependant's estate may be subject to inheritance tax.
• The Government has put a limit on the total value of all retirement benefits (excluding State Pensions) that you can normally take without paying a tax penalty. The limit is called the "lifetime allowance" and the tax is called a "lifetime allowance charge". You should already be aware if you are likely to be affected. Your financial adviser will be able to give you more details.
• Please note we’ve included only a general tax summary and individual circumstances may differ.
• Tax rules can change.
• Your financial adviser can give you more details about your tax position.

Can I change my mind?

• You can change your mind within 30 days from the date you sign the declaration on the application form.
• In order to cancel the plan, you must:
1. Return the enclosed cancellation form which you can find at the back of your illustration.
2. Return within the 30-day period, all of the tax-free cash sum and any instalments we may have already paid, by cheque made payable to Aviva. Please post this to the address given on the cancellation form.
3. Gain agreement from the transferring pension scheme that they are willing to accept the pension funds back. If the pension scheme will not accept this, it is your responsibility to gain agreement from another insurance company to receive the funds.
• If you cancel during the 30-day period, we will refund all payments we have received.

How will I know how my plan is doing?

• We'll send you a yearly statement.

Terms and Conditions

• This Key Features document gives a summary of Aviva’s With-Profits Pension Annuity. It doesn’t include all the terms and conditions.
• You can find further details of the benefits and options available in the ‘Terms and Conditions’. If you would like a copy, please ask your financial adviser or contact us direct.
• We’ll write and tell you of any changes that affect your plan.