You contribute £2,880 to an immediate vesting annuity. The Inland Revenue then immediately adds £720 in tax relief, bringing the contribution amount up to £3,600. Of this, 25% is paid back to you in the form of a tax free lump sum of £900. The remainder of the fund goes to purchase an annuity.
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Immediate Vesting Annuities can only set up on a single life basis with a level annuity paid yearly in advance, paying maximum tax free cash. If the options or contribution amounts you require are different to this, you may prefer a Purchase Life Annuity.
