annuities

dunstonh

I have asked around and heard nothing about him, neither good nor bad.

That is a problem many of us IFAs have. It is largely a cottage industry with small firms with 1-3 advisers being more typical.

I'm not very impressed by an advert he has run in the local paper offering to help people get out of CC agreements via a loophole. ( Seems wrong to me.)

I agree. I have been approached by a couple of these firms and I can tell you that its a complete rip off and an IFA should know better. It does call their character into question if they are willing to earn from a scheme that is really only there to generate the legal firm and introducer an income from a tiny minority of cases that may have success. Plus, personally, I believe if you agree to take on a debt then you should repay it.

I am very new to all this. Can you offer any advice please? Many thanks.

It is impossible to offer advice over a forum and would actually be an FSA breach. What is posted here is discussion but it can help.

I will be blunt, the problem with ALL of the options is that they could be the best option or the worst option at the point of recommendation. The reason for that is you don't know the date of death. If you did, then it would be easy to know which option is best. As we don't, you have to make a judgement call. You can find the annuity is the best option as it will pay the fees and cover increases but effectively erode the capital away quickly (that could be returned on death). However, it will continue to pay for life. Investments will zig zag in value but allow an income to be drawn to cover the fees. Over the long run there is a risk the capital could be eroded and ends up at zero and the income goes with it (although there are some options that allow a continuous income even if capital has gone).

Investments can prove to be the best option in the medium term as far as return of capital is concerned and possibly in the long term depending on investment returns. Annuity is the best option for certainty of income but more likely to see no capital returned after the medium term.

If the income draw on the capital is low, then investing could well be the best option. If the income draw required is high to start with then annuity is probably more favourable.

So, you see there is no perfect option. Its a case of being aware of the pros and cons of each and really making a decision that you realise may end up being the wrong one but at least you chose it with your eyes wide open.

As it happens, most financial decisions in life are like that. A failing over the years is that the industry hasn't been very good at presenting it that way.

Sterling are not too bad on their ISAs and unit trusts for pricing and the bond can be too. However, be wary. Its offered by Zurich and Zurich allow advisers to built in really high fees. If you get an illustration on the investment, check the reduction in yield due to charges. Its usually near the end and will say something like "putting it another way, the charges on the product will have the effect of bringing a 6% p.a. return down to 5%. if that figure gets lower than 4.5% then its far too expensive. Especially for corp bonds where its usually closer to 1% reduction.

Robert_Sterling_3

Pal wrote: »

You need to go through an IFA to get the best annuity. Annuity rates change regularly and who is best one week will not be the week afterwards.

How much money have you got to buy the annuity with?

Moneysupermarket might show you the best annuities.

dunstonh

Robert_Sterling wrote: »

Moneysupermarket might show you the best annuities.

I doubt it. The best annuity providers tend to only deal through IFAs. You can haggle with the providers as well and play them off against each other. Especially with enhanced/impaired life. A website doesnt do that.

Although as it was posted in 2004, I think we are too late.

EdInvestor

Church_mouse wrote: »

I have asked for the advice from 3 IFA's. One from Saga, one from Help the Aged and one who is local, works in partership with his wife and is not allied to any organisation.They all mention Care Home Annuities with varying degrees of emphasis.

Some useful info on immediate needs (care) annuities here:

http://www.sharingpensions.co.uk/annuity_immediate_needs.htm#text2

and additional approaches to funding care:

https://www.hsbcpensions.co.uk/nhfa/pdfs/is6.pdf

You will seer that very wide variations in quotes can happen. The low one sounds good. Watch oute for "commission bias" with IFAs on annuities vs investment solutions, especially where "investment bonds" are mentioned - these can be accompanied by large commissions.

The least keen is the last local one. The figures for an annuity vary considerably, from £ 78,000. th £ 82,000 to £ 53,000. All these quotes are based on the same information. It is tempting to go with the one who is the cheapest and who is local

There are IIRC only three annuity providers, so the quotes you get from each individual advisor should be the same and there should be three of them.Are you suggesting that each IFA is providing only one annuity quote?