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Private Annuity Trust (PAT)

The private annuity is provided by a commercial trust established by an appropriate employer. Unlike an insurance company, the Private Annuity Trust is not permitted to make any profit.

This is a restricted trust. Its provisions are drawn so as to meet the very strict limitations imposed by the Inland Revenue upon the use of pension saving funds. It is administered by independent professional trustees, who must have their own trust administration license.
 

The annuity rate offered by the Private Annuity Trust is substantially higher than the best rates offered by insurance companies. This allows the provision of correspondingly higher taxable pension to the pension scheme members upon retirement.

The private annuity is an investment made by the pension scheme. Just like dividends from a share portfolio, the pension scheme will receive private annuity income from the member’s retirement date.

The pension scheme must sell those income rights to an insurance company when the member reaches age 75. In return the scheme receives compulsory annuity income. However, the savings capital is retained by the Private Annuity Trust for the provision of retirement benefits.

For the first time in a generation, pension savings law is matched by pension investment reality.
     

Mardon Financial Advisers ltd is Authorised and Regulated by the Financial Services Authority. Our registration number is 136089 and this can be checked on www.fsa.gov.uk/register

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Telephone 01743 285777 | Email advice@mardons.co.uk