Fixed Term Income Plans have seen their popularity soar in the first half of this year, new figures from Canada Life have revealed.
Sales of Canada Life’s FTIP jumped by 123% in the first half of 2026 compared with the same period of 2025.
The firm said that for retirees who may not be ready to commit to a lifetime annuity or don’t want to take investment risk in drawdown, FTIPs are emerging as a popular alternative. They provide the same income security as an annuity but for a shorter set period, with the added benefit of an optional lump sum paid at the end of the term, known as the Guaranteed Maturity Value.
According to Canada Life’s illustration, £100,000 invested over a 10-year term could provide a guaranteed income of £5,417 a year and still return the full £100,000 at the end of the term.
Nick Flynn, retirement income director at Canada Life, said: “As the cost of government borrowing has risen along with interest rates, annuity rates have hit record highs in recent years. FTIPs have benefitted from this same rate environment and are gaining popularity as retirees look for increasingly flexible ways to manage their pension income.
“An FTIP is a straightforward way to turn some or all of your pension into a guaranteed income over a fixed period. When you set up your plan, you have the flexibility to choose whether to take a regular income, a lump sum at the end or a combination of both.”
Canada Life said those considering whether a FTIP is right for them will have pension savings of at least £10,000 to invest, after taking tax-free cash; want the option to take guaranteed income for a selected term of between one to 30 years; want to know exactly how much they’ll get back at the end of the term; not want to take any investment risk; and be in a position to tie up money for the chosen term of the FTIP.
Flynn added: “FTIPs are resonating with retirees because they solve real challenges, helping retirees ‘buy time’ before committing to drawdown or purchasing a lifetime annuity. Customers are choosing the product to bridge the gap to state pension or defined benefit pension start dates, help fund specific commitments such as mortgage payments or school fees or stabilise income in the earlier years of retirement.
“FTIPs are designed to provide a steady income over a set timeframe, whilst retaining the future flexibility to choose the product that best suits your needs at the end of the term.”
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