FAQ
What is a unit trust?
A unit trust refers to an investment portfolio that is managed as a Collective Investment Scheme and divided into equal parts or ‘units’. Unit trust investors therefore buy units of the portfolio, with each unit representing a proportionate share of all the assets underlying the portfolio. The unit trust price reflects the current market value of the underlying assets, divided by the number of units in issue. The unit trust vehicle is appropriate for if you want to invest discretionary (non-retirement) savings...
What is the difference between a guaranteed annuity and a living annuity?
A guaranteed annuity will provide an income that is guaranteed to last for your whole life (and your spouse’s, if applicable), but your heirs won’t be able to inherit whatever is left on your death. In other words, your capital dies with you. Typically, you also have no say over your initial income and no flexibility to make changes once you’ve purchased the product. There are various types of guaranteed annuities e.g. those that provide an income that increases with inflation, those with a level income, those that de...
What are the living annuity risks and benefits?
Among the living annuity risks and benefits include that in exchange for the flexibility benefit a living annuity provides, you assume the risk of securing an adequate, sustainable income. The income you choose to draw from your living annuity may be too high, causing your capital to reduce over time. This means that your future income could fail to keep pace with inflation or even that you outlive your savings.Choosing your own investment portfolio brings inherent risks. Your investment value and returns are not guar...
What transfers can a living annuity accept and make?
Transfers in: A living annuity may only accept transfers from another living annuity or from a retirement fund (pension, provident, pension preservation, provident preservation or a retirement annuity fund). It may not accept voluntary contributions. It is not possible to transfer a guaranteed annuity into a living annuity.Transfers out: You may transfer your living annuity to another provider’s living annuity or to a guaranteed annuity.
Can you transfer your preservation fund?
Yes, you can transfer your preservation fund tax free:Between pension preservation fundsBetween provident preservation fundsFrom a pension preservation fund to a pension fundFrom a provident preservation fund to a provident or pension fundTo an RA
