Can the income from my Secure Retirement Income (SRI) investment increase over time?Fri Jan 06 14:48:00 GMT 2017
Yes. If you don’t want to take your guaranteed income payments straight away you don’t have to and the later you leave it the higher your income could be. The amount of income you’ll receive is worked out by multiplying your age-related income rate with your income base.
Your age-related income rate is based on the age at which you start taking your guaranteed income payments from your Secure Retirement Income investment.
Increases to your income base
On each review date anniversary before you start taking your guaranteed income payments we’ll automatically increase your income base by at least 1%* of your original investment – we call this a guaranteed pre-income increase.
However, we could increase your income base by more if your fund has done well. Here’s how it works. At the review date of your Secure Retirement Income investment, we look back to see what the fund value was on the Secure Retirement Income review date anniversary and each of the corresponding monthly anniversaries – we call these dates the monthiversaries.
We take the highest monthiversary value and, if it's higher than your current income base plus 1%* of the original investment made into your Secure Retirement Income account, this will become your new income base.
This means that your income base will increase to the higher of:
- the current income base plus 1%* of your original investment; or
- the monthiversary lock-in value**.
*This is our current terms for new Secure Retirement Income investments made from 7 January 2017. If you have Secure Retirement Income investments that were applied for before 7 January 2017 the percentage that applies to those investments may be different from this. You can find the rate that applies to those investments in the Confirmation of your Secure Retirement Income investment statement we sent you when you made the investment. You can also find this statement in your Document Library.
**Proportionately reduced for any switches out of your Secure Retirement Income investment.
Please bear in mind that income payments and charges will reduce the value of your savings over time. Changes to your fund value will also affect how much your savings are worth.
These factors in combination mean that the monthiversary feature is likely to only increase your income base in the early years of your investment.
You can read more details about the guaranteed pre-income increase and monthiversary features in our leaflet What is Secure Retirement Income?(Opens new window)