Benefits of the Longevity Income Plan
We believe the Plan offers you the following benefits:
1. It could take the pressure off your existing assets
Knowing that you'll receive an income from your Plan from your chosen Vesting Age can help you avoid having to deplete your existing assets, such as property, to support your late retirement. It could also help you pass down your remaining wealth efficiently to your children and grandchildren.
2. It could protect you against the effect of inflation
Rising at 3% per annum, inflation would halve the 'real' value of a level income, such as from an annuity, within 23 years meaning you'll need more money to maintain the standard of living that you're used to. The Longevity Income Plan has the potential for increasing income so investing a small portion of your retirement savings could help counter the effect of inflation on your income in later life.
3. It could help with increased living costs
Living costs in later life such as healthcare, fuel, water and food are already high and they're increasing rapidly. It's been estimated that inflation for pensioners is currently three times higher than the national average. The Plan's potential for rising income means you could receive more money when you're likely to need it most.
4. It's a tax-efficient way to invest your savings
The Plan is tax-efficient in two ways: because the Life Fund in which your Plan is invested is based in Ireland, the growth on your investment is not subject to UK income tax. And when you start to receive income from the Plan, a portion of the annual payments is viewed as a return of your original capital (i.e. capital content) and therefore not subject to income tax under current legislation.
5. It provides a neat complement to your pension and other retirement planning products
The Plan is not an alternative to other retirement savings like pensions, but is complementary to them, by picking up just where they could tail off in late retirement. And it's particularly beneficial for those who are reaching today's
legislative limits on the maximum permitted value of savings within their pension.