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Annuity in arrears |
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Annuity in arrearsAn annuity with a first payment one full period hence, rather than immediately.Annuity in arrears Similar MatchesSingle life annuitySingle life annuityAn annuity covering one person. A straight life annuity provides payments until death, while a life annuity with a guaranteed period provides payments until death or continues payments to a beneficiary for a guaranteed term, such as ten years. Life annuityLife annuityAn annuity that pays a fixed amount for the lifetime of the annuitant. Retirement annuity contract (RAC)Retirement annuity contract (RAC)Prior to 30th June1988, people not in pensionable employment (employment where no pension scheme exists) or people who were self employed were able to qualify for tax relief for contributions made to a pension scheme known as a retirement annuity under sections 226 of the Income and Corporation Taxes Act 1970. Although RACs were replaced by personal pension plans from 1st July 1988 those already in force may continue to operate. AnnuityAnnuityThe payment of a regular income by a life company to an annuitant in exchange for a lump sum either for life or shorter periods.Annuities are typically used for pensions and the individual receiving the annuity is known as an annuitant. In the UK they can broadly be classified into two types:A Compulsory purchase annuity which is bought from the proceeds of a pension fund and is taxable as earned incomeA purchased life annuity which is bought with an individual's own capital and is taxed at a lower rate than a compulsory purchase annuity.There are three different types of pension annuities, commonly referred to as standard annuities, with-profits annuities and unit-linked annuities.Standard pension annuities are the most commonly purchased and account for over ninety percent of the UK market. The income from a standard pension annuity is guaranteed for the rest of the annuitant's life whereas the income from a with-profits or unit-linked annuity will fluctuate depending on the investment performance of the underlying assets. There are various options which can be provided including:Annuity certain: Income is paid for a given period whether or not death of the individual occursDeferred annuity: Income which does not commence until some future specified dateEscalating annuity: Income which increases annually by a given amount, for example 3%. The choosing of this option results in lower income compared with a level annuity over the initial yearsImmediate annuity: An annuity which starts to pay income soon after it has come into operation, for example at the end of the month following the payment of the lump sumJoint life annuity: Income usually relevant to two people (for example man and wife) which continues until the death of the first person onlyJoint life and survivor annuity: Income usually relevant to two people (for example man and wife) which continues until the death of the second personLevel annuity: Income which is paid at a fixed rate throughout the life of the individual. See also guaranteed minimum periodTemporary annuity: Income is paid either for a fixed period or until earlier death. Joint and survivor annuityJoint and survivor annuityA type of annuity opened by and intended for two people, that makes payments for the entire lifetime of both beneficiaries, even if one of them dies. Further Suggestionsincreasing life annuityfixed annuity Tax sheltered annuity joint life annuity Immediate payment annuity reverse annuity mortgage joint life and survivor annuity Normal annuity form Hybrid annuity variable annuity escalating annuity Equivalent annual annuity Annuity factor purchased life annuity annuity starting date Single Premium Deferred Annuity (SPDA) Annuity certain Wraparound annuity compulsory purchase annuity Annuity starting date Reverse annuity mortgages (RAM) annuity certain Deferred nominal life Annuity temporary annuity Qualifying annuity |
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