Purchased Life Annuities. Good investment for income?

Seemore_2

I have just read this article on the HL site, and thought it worth posting as a few people on MSE have sought advice on investing a lump sum.

I am no expert but have usually found HL to be fairly reliable.


http://www.h-l.co.uk/news/Feature-articles/id/1941

dunstonh

I am no expert but have usually found HL to be fairly reliable.

Hmm. They are more recognised for promoting things they sell and slagging off those things they don't. They have been negative towards them in the past. Now they seem positive. However, they appear to want to sell PLA's now so I suppose that explains it.

Purchased life annuities can be useful if they fit the need. For some, lifetime annuities will be better from an immediate commencing personal pension or a single contribution to a personal pension then immediatly transferred to an enhanced annuity. Then of course you have the conventional investment options available for income.

jamesd

As dunstonh implied, you need to add a large pinch of salt to anything that HL is writing about.

The tax treatment of a purchased life annuity might make it useful to take the 25% tax free lump sum from a pension and buy a PLA instead of just buying with 100% of the pension pot. As with the normal retirement annuity, access to the capital is lost forever.