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Benefits payable on retirement

Annuities with special terms

Sometimes it will be possible to buy annuities with special terms. These include "impaired life annuities", "guaranteed annuities" and "sovereign annuities". It is important to take advice in relation to these annuity options if they are available to you.

Impaired Life Annuities
If an individual is not in normal health for a person of their age and gender, some insurance companies may be prepared to offer a better annuity rate, simply because there is the possibility that they might not have to pay out the annuity for the "average" expected lifetime.

Guaranteed Annuities
In the past, it was quite common for pension savings policies, particularly "with-profits" policies, to guarantee the annuity rates at which the pension savings could be applied to buy a pension at retirement. When interest rates are very low (and the cost of purchasing annuities therefore relatively expensive), some of these guarantees will be extremely valuable.

Sovereign Annuities
A sovereign annuity is an annuity generally backed by Irish government bonds. Sovereign annuities are less expensive than traditional annuities but carry a risk that annuity payments can be reduced or suspended in the event of a default on the underlying bonds. Sovereign annuities are not currently available for purchase by individuals (January 2016), but they can be used by trustees to buy annuities in relation to current pensions in payment in defined benefit schemes.