Impaired Life Annuities

Merrill_Lynch

Dear All

I am currently looking for the best annuity deals possible for myself and my partner, both aged 56. It's possible that BOTH of us may be eligible for "impaired life" rates. If not both, then certainly one of us.

Can anyone suggest which company might be the best provider in terms of rates.

Two already suggested to me are Prudential and Partnership Insurance ???

I keep checking the Mail on Sunday's annuity charts for general rates...any further advice on annuities generally. Also, we are civil partners, should we be looking for single deals or joint ?

Many thanks

dunstonh

Can anyone suggest which company might be the best provider in terms of rates.

It doesnt work that way. It is impossible to tell you who is best because its dependent on so many different things.

Two already suggested to me are Prudential and Partnership Insurance ???

Most of the impaired/enhanced annuity providers only deal through IFAs. Those that dont still give the same annuity rate if an IFA isnt used.

I keep checking the Mail on Sunday's annuity charts for general rates

Which is a complete waste of time. Annuity price charts are a very very loose guide at best. You would never purchase an annuity on the basis of one of those as they are not accurate enough. They are based on data that is often out of date and makes a number of assumptions. You also tend to find that they give provider defaults rather than what is actually achievable.

any further advice on annuities generally.

See an IFA. Its a no brainer on this as that is the only way to get full access to enhanced/impaired life annuities. The provider that comes out top more often than not in these cases is Just Retirement. They dont deal direct to public. Plus, a good IFA can often haggle the annuity rate upwards through their broker consultant. We are not just talking pence either. I was able to play Just Retirement against MGM and Partnership recently and got the eventual annuity rate increased by over 10%.

Plus, seeing an IFA in this scenario is effectively a nil cost option to you. You have nothing to lose and everything to gain.

EdInvestor

There are specialist IFAs in this field

https://www.williamburrows.co.uk
https://www.annuitybureau.co.uk
https://www.annuitydirect.co.uk

dunstonh

I really dont see why you promote those particular IFAs Ed when it is a transaction that is available through any IFA. It should also be noted that those particular IFAs also have focused sites on other areas as well. So, does that really make them a specialist or does it really mean they have several websites each on onesubject that makes them look like they are specialists. At least one of the companies (probably two) focus on high net worth clients and are fee based only. I suspect that they are very good value on large cases and the quality would be first rate. However, on smaller cases i doubt it would be cost efficient. ML doesnt say how much is involved.

EdInvestor

And I'm not sure why you always complain when I mention them - or provide a link to the regulator's Annuity comparison site at https://www.fsa.gov.uk/tables

The reason I mention these sites is because they provide a lot of useful information about annuities and other financial products of specific interest to people approaching or in retirement.

I think it's a good thing if people are well informed before they approach anyone selling financial products of any kind.

I hope you agree.

dunstonh

And I'm not sure why you always complain when I mention them

You mention them as specialists which only one of them really is. You disregard the fact that any IFA can do these. Rather than promote certain corporates, why not just stick with saying IFAs.

or provide a link to the regulator's Annuity comparison site at www.fsa.gov.uk/tables

The FSA tables are useless. It should tell you enough if IFAs can reliably use them as proof of research because they are so inaccurate. They are little more than a rough guide to what you could get.

I hope you agree.

Information is useful but it is only right that the limitations of the tables is pointed out that using a couple of internet sites is not the only option. Many people still prefer to use local companies and not some central office based corporate.

Merrill_Lynch

Thank you dunstonh and ed...all very very useful.

A couple of final questions if I may.....

1. How do you find an IFA with a good record in this field ? ( North Wales )
2. How much should we expect to pay...would it be a straightforward fee or some form of commission etc ??

I should add: Currently a Standard Life pensions adviser is looking in to all this for us after I requested some info. He advised us originally re the Std Life pensions that we have. He says he can look at all avenues and get a good deal. Clearly he won't be whole of market....but says he would be looking at several of the "best" , getting their rates etc, with the aim of finding the "best" deal. One would imagine this isn't being done free of charge.
I would imagine both of you may well have a lot to say about this...

Merrill

dunstonh

1. How do you find an IFA with a good record in this field ? ( North Wales )

Its not exactly a transaction that requires a good record as its all research and then a few phone calls to haggle the price.

www.unbiased.co.uk is the main UK database for IFAs. Make sure you untick the default option to only show IFAs that pay. Otherwise you will only get a limited number as most dont pay to advertise on that site.

2. How much should we expect to pay...would it be a straightforward fee or some form of commission etc ??

Depends on the adviser. Like any retail business, prices vary. However, commission option is available and with annuities it is typically 1-2%. Sometimes commission can be cheaper than fee option.

Currently a Standard Life pensions adviser is looking in to all this for us after I requested some info. He advised us originally re the Std Life pensions that we have. He says he can look at all avenues and get a good deal. Clearly he won't be whole of market....but says he would be looking at several of the "best" , getting their rates etc, with the aim of finding the "best" deal. One would imagine this isn't being done free of charge.
I would imagine both of you may well have a lot to say about this...

Std Life wont come close to often a decent rate. Even if they did, an IFA has access to them. I have done one std life annuity in the last 5 years and that was because the value was so small and no-one else would take it.

Std life operate a tied salesforce. Under FSA classification, they are employed by the ensurer to act in the best interests of the insurer and offer the best product they have available within their product range. For IFAs, the classification is that the IFA is employed by you to act in your best interests and advice on the best product available to you. Std Life will operate on commission basis which is 1.5%.

There is never a good reason to use a sales rep from an insurer. Indeed, often their products are priced less competitively than the whole of market version. Never better though.

EdInvestor

One reason why the specialisst may be able to get you a better deal is because they are doing much bigger volumes of business with the providers than your bog standard IFA who may well be mainly doing mortgage work or group pensions business.Another reason is they may offer a good service by email .

To evaluate the usefulness of the FSA tables, you can compare their results with the various other annuity calculators about on the sites mentioned. There is another one here: https://www.h-l.co.uk

The H-L IFA service could no doubt do you a quick quote for impaired life annuities,depending on how complex the issues are.

jem16

EdInvestor wrote: »

One reason why the specialisst may be able to get you a better deal is because they are doing much bigger volumes of business with the providers than your bog standard IFA who may well be mainly doing mortgage work or group pensions business.

A lot of IFAs belong to a larger network such as Sesame and can provide a better deal than individual firms.

Out of the three you mention the william burrows link just says "OK", annuity direct is a website for Directly Financial and annuity bureau is a website for Alexander Forbes - neither of which seem to belong to a larger network.

Another reason is they may offer a good service by email .

So do a lot of local IFAs.

The H-L IFA service could no doubt do you a quick quote for impaired life annuities,depending on how complex the issues are.

Another recommendation for H-L. Are you sure you are not receiving commission?

H-L's IFA service is known to be more expensive.

dunstonh

One reason why the specialisst may be able to get you a better deal is because they are doing much bigger volumes of business with the providers than your bog standard IFA who may well be mainly doing mortgage work or group pensions business.Another reason is they may offer a good service by email .

The UK's biggest IFA in provider terms is Sesame. They are known to generally get the best terms. However, the bulk of IFAs that are members of sesame are small independent local firms made up of 1-5 advisers. There are other large networks as well that will get similar terms. We know from past checks that networked advisers have often come in with better deals than the directly authorised firms but rarely any worse.

To evaluate the usefulness of the FSA tables, you can compare their results with the various other annuity calculators about on the sites mentioned. There is another one here: www.h-l.co.uk

Most tables use the same data sources or make the same assumptions. This has been discussed before a number of times on here Ed and evidence given. Typically if you look at the tables and take the top 5, then get real quotes from them, the figures will be different and the order will change. This could be partly down to better terms but often its down to the annuity rates changing quicker than the tables can keep up.

The H-L IFA service could no doubt do you a quick quote for impaired life annuities,depending on how complex the issues are.

I wondered how long it would be before you would promote your favourite company.