What is the Guaranteed Lifetime Income plan?

Our Guaranteed Lifetime Income plan (the Plan) allows you to use some of your pension savings to purchase a guaranteed income which will be paid to you for the rest of your life.

However, unlike many other guaranteed lifetime income products, the Plan is fully integrated into your Flexi-access Drawdown Account.

This means you can benefit from a guaranteed regular income for life throughout your retirement, without losing the flexibility and potential investment growth that comes with pension drawdown.

 

How is the Plan managed alongside pension drawdown?

The Plan is available within a Flexi-access Drawdown Account via your financial adviser, who can support and help you manage it, alongside other money that’s already invested. It does mean that you would need to hold a Fidelity Pension Account. To be eligible to purchase the Plan you need to be aged between 55 and 85 (57 from 6 April 2028). Speak to your financial adviser for further details.

Your guaranteed income is paid monthly into your Product Cash account - and because everything is managed together on the Fidelity Platform, you will have the flexibility to decide whether to withdraw it to your chosen bank account, keep it in your Product Cash account or reinvest it back into your Flexi-access Drawdown Account so it has the potential to grow.

The Plan offers peace of mind by providing a guaranteed income to help cover your essential day-to-day spending, while the integration with pension drawdown provides flexibility to make changes if your circumstances change throughout your retirement.

 

The Plan and Income Tax

Holding the Plan within the Flexi-access Drawdown Account will help you stay tax efficient. This is because your income only becomes liable to Income Tax when you choose to withdraw it to your chosen bank account. As the Plan pays income into your Product Cash account, this gives you control to choose when and how much income you withdraw and therefore how much tax you pay.

An optional death benefit

When you take out your Plan, you can choose to include a death benefit option (also known as Value Protection). When you die, if you have chosen this benefit and the total amount of income received from the Plan is less than the amount used to purchase the Plan, the difference will be paid into the Product Cash account. It is then distributed by the Fidelity Pension Trustee to your nominated beneficiaries along with other remaining assets.

How much guaranteed income will I receive?

The amount of income you’ll receive depends on various factors, including:

  • Your age, health and lifestyle
  • The amount of money used to purchase the Plan or the amount of guaranteed income you choose to receive
  • Whether you choose to include the Value Protection death benefit option

Your financial adviser can help you work out the amount of guaranteed income that meets your needs.

Is the Plan right for me?



  • The Plan may be right if you:

    • Would like access to a regular, guaranteed retirement income for life
    • Want to keep some of your pension savings invested so you can potentially benefit from future growth
    • Want to receive a guaranteed lifetime income into your Product Cash account to manage all your income in one place
    • Would like the option to potentially provide a lump sum death benefit to your Product Cash account when you die (via Value Protection where applicable)
    • Would like to avoid part of your retirement savings being impacted by the investment markets
    • Live in the UK and are aged between 55 (rising to 57 from 6 April 2028) and 85 years
    • Typically have pension savings of  £100,000 or more
    • Have or are about to appoint a financial adviser to manage your retirement income

  • The Plan may not be right if you:

    • Don’t have a need or desire for a guaranteed lifetime income
    • Prefer a standalone guaranteed income not held within the Pension Account
    • Prefer to keep all of your pension savings invested so you can potentially benefit from any future investment growth
    • Have a very short life expectancy or are terminally ill 
    • Are looking for a short-term income solution rather than one that lasts a lifetime
    • Want to use all of your pension savings for a guaranteed income
    • Don’t have or want to use a financial adviser
    • Would like a guaranteed income that automatically increases each year
    • Want a guaranteed income to continue to a spouse or dependant in the event of your death

Your financial adviser can help you make the best choice for your needs. Get in touch with them to discuss whether the Plan is right for you.

If you would like to find out more information about the Plan, take a look at our customer guide.

The value of your investment can go down as well as up and you may get back less than you paid in. Laws and tax rules may change in the future. Your own circumstances and where you live in the UK also have an impact on tax treatment.

Access to impartial guidance

We recommend you seek appropriate guidance or advice before you make any decisions. You can also get free impartial guidance over the phone or face to face from the age of 50 with Pension Wise a service from MoneyHelper. Go to moneyhelper.org.uk/pensionwise  or call 0800 138 3944

If you want to use a financial adviser, you should always make sure they're authorised by the Financial Conduct Authority (FCA).

The government's MoneyHelper service has a useful guide to help you find a financial adviser.

Other ways to access your pension savings