Your options

There are a number of payment options available:

1. Guarantee Period You can guarantee that your income is paid for a minimum period even if you die.
2. Spouse's or Civil Partner’s Pension You can make provision for your spouse or registered civil partner by building in a spouse’s or civil partner’s pension, which can be payable immediately on your death or after any guarantee period has ended.
3. Dependant's Pension This allows you to provide for your surviving partner if you are unmarried, or not in a civil partnership.
4. Anticipated Bonus Rate (ABR) The main factor that determines the starting level of your pension is the ABR. The ABR is a mechanism that allows you to exercise your own judgement as to the likely future level of bonus rates, and to use this to choose an ABR that will help you to achieve your desired pattern of income payments - level, increasing or decreasing.
5. Payment Frequency You can choose to have your income paid to you every month, every three months (quarterly), every six months (half yearly) or once a year. Payments will be made either in advance (at the start of the payment period) or in arrears (at the end of the payment period).

When you buy an annuity, the amount of income you will receive (annually) will depend on a number of factors, including:

• the size of your pension fund
• future bonus rates, which are not guaranteed
• the level you set your ABR at
• your age and sex
• the options you choose.

Examples of payment options

The table below shows how your options could affect your income. The figures are based on a married man aged 65 exactly with a wife aged 62. The first line shows an annual income of £1,000 payable in arrears. The lines that follow give an indication of the impact of choosing the various options.

Source: Legal & General January 2008.

The figures given in the table are for illustration only and may change at any time.