Offshore Lifestyle Annuities
International Lifestyle Annuity
The International Lifestyle Annuity is suitable for clients who would like:
- More control over the investments that are in their pension fund
- To provide an income to a spouse or partner on their death
- A higher flexible level of income than is available through traditional fund annuities.
If a client has these requirements then the International Lifestyle Annuity may provide the solution as it gives an opportunity for:
- A better investment return, because the annuitant can choose the underlying assets that the annuity fund invests into
- An annuity to be paid to a surviving spouse or other dependant after the death of the annuitant
- Flexible income for the annuitant because the annuitant can choose (within specified limits) the amount of payment they wish to receive on either a monthly, quarterly, half yearly or annual basis.
How does it work?
A client can apply for an International Lifestyle Annuity by either investing an amount of money directly to purchase an International Lifestyle Annuity or by requesting that the Trustees of their QROPS (pension plan) purchase an International Lifestyle Annuity with some or all of the funds that are available within their QROPS.
If there are existing assets that the client owns or that are contained within the client’s QROPS, they may be transferred in-specie into the International Lifestyle Annuity (subject to approval by STM Life). Alternatively, cash can be transferred to STM Life either directly or via a QROPS. It is important that the assets chosen to be held within the annuity fund are sufficiently liquid to allow for regular payments to be made to the member. There is no specific rule as to what proportion of the fund must be “liquid” as assets may generate sufficient dividend income to meet the regular payment requirements.
If the International Lifestyle Annuity has been purchased by a QROPS fund, the QROPS Trustees have discharged their liabilities as they have used the pension fund to purchase an annuity for life for the member.
In either circumstance, the member can now appoint an Investment Adviser to manage the investments within the fund. The annuitant or their appointed Investment Adviser, can select the range of assets to hold within the fund. These assets are subject to the approval of STM Life but the range of possible assets is extensive.
The International Lifestyle Annuity differs from standard annuities that are available in the market in that it allows for a variable level of income to be taken in any one year, within pre-defined maximum and minimum limits. This gives the annuitant flexibility in their lifestyle from one year to the next, allowing them to cater for larger expenditure in certain years, if required. In addition and contrary to the normal experience of annuitants, the annuitant and his adviser have the ability to be actively involved in the investment decisions and in the choice of the class of assets that the funds are invested into.
- Client must be aged 55 or greater.
- Minimum fund required is £350K
How do I fund my Annuity Certain?
An Annuity Certain can be purchased from a number of international pensions; please ask us for more details.
What is an Annuity Certain?
- An Annuity Certain is a contract which pays you a fixed and guaranteed income for a set number of years
- Funds can be taken over a period of between 3 and 10 years
- If you are not a UK tax-resident then UK income tax should not be payable
What happens on Death?
- The member nominates a beneficiary
- On death of the member any outstanding payments would be paid to the nominated beneficiary
- For instance, if the member elects for a 10 year annuity certain and dies in year 4, then the following 6 annual payments would be paid to the nominated beneficiary
Find out more about Offshore Lifestyle Annuities