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Life Trust Insurance claimed its Longevity Income Plan was the first product of its kind to offer an income to people that increased substantially as they got older. The plan is intended to work alongside a traditional pension or an annuity, providing people with an income boost when they reach 75 or 80, a time when they are likely to need to spend more on care services and when their original pension may have begun to be eroded by inflation. Payments are made each year through a combination of investment returns, the original lump sum being disinvested and so-called birthday units that are allocated to people each year and are made up of the funds of previous holders who have died being redistributed. Someone who invested £50,000 when they were 50 could expect an initial payout of around £19,600 by the time they were 80, assuming investment returns of around 7% a year. If people die before they receive their first payment the original sum they invested is refunded to their estate, and if they die before the 20 year period is up their estate is refunded the original investment minus any payments they have received, meaning people never get out less than they put in. Find Out More

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