Drawing Annuity - how long to wait?

Be_Happy

Hi

Can anyone give me a rough guess as to how long it takes until an annuity starts.

I have a pension plan and my IFA has shopped around for the best annuity deal. He recommended one to me and, five weeks ago I completed all the forms. This week I received an Inland Revenue form from the original pension company to complete and return to them saying that as soon as the form was filled in they could transfer the fund. I didn't have the info to answer most of the questions, but filled in what I could and sent form on to IFA for him to complete. Things don't seem to have moved very quickly over these weeks. IFA says these things take time and everything is progressing well.

My main concern is that something will happen to cause a stockmarket crash and my fund will collapse in value. The annuity quote is guaranteed for a certain time, but obviously the pension fund value is not.

I appreciate that times will vary between different companies, but is there an average transfer time?

dunstonh

Things don't seem to have moved very quickly over these weeks. IFA says these things take time and everything is progressing well.

5 weeks is nothing to be concerned about.

My main concern is that something will happen to cause a stockmarket crash and my fund will collapse in value. The annuity quote is guaranteed for a certain time, but obviously the pension fund value is not.

If the funds havent left them yet, then switch into a non-stockmarket linked fund.

I appreciate that times will vary between different companies, but is there an average transfer time?

6-8 weeks. 4 would be excellent but not usual. Longest I have had took 18 months.

whiteflag_3

SilverLady wrote:

Hi

My main concern is that something will happen to cause a stockmarket crash and my fund will collapse in value. The annuity quote is guaranteed for a certain time, but obviously the pension fund value is not.

QUOTE]

Are you saying your IFA hasnt switched you into a deposit fund ?

montycat_2

Hi ,
Not wanting to frighten you but ,it took 6 months to sort out an annuity for me .There were 2 pensions involved and the money was switched into a "holding "fund where it still grew while the legalities were worked out .

Good luck -I don't understand the technicalities but ,wanted to share my experience .

Titan

ANYTHING to do with pensions takes considerable time, it's not just a case of selling stock and writting a cheque out, there is all sorts of paperwork to be signed by the transfering scheme and the annuity provider, all of it needs checking and approval...

I have dealt with pension transfers that have taken over 3 years, of course this was a pension transfer and not an annuity purchase but the process is very similar.

6-8 weeks is a reasonable time to wait for an annuity purchase, it can be done quicker but that is the exception rather than the norm.


Hope everything goes ok.


Titan

Be_Happy

Thanks for info. Sounds like time varies, but delay so far is not unusual. Will just wait and see what happens.

Re switching to deposit fund, I leave this to IFA. I've used him in past and found his advice has been good.

EdInvestor

Re switching to deposit fund, I leave this to IFA. I've used him in past and found his advice has been good.

Just mention to him you're worried about the stockmarket falling etc.He may tell you he's already switched the money into the cash fund.If he hasn't done so, he'll know he should get on with it.

Be_Happy

EdInvestor wrote:

Just mention to him you're worried about the stockmarket falling etc.He may tell you he's already switched the money into the cash fund.If he hasn't done so, he'll know he should get on with it.

Thanks. I've just e-mailed him re my stockmarket crash worries, so at least he knows I'm concerned.

Be_Happy

IFA has replied that my fund is invested in Property, Fixed Interest and Cash, so I have zero exposure to stockmarket. Has also said that he is pushing Insurance Company holding pension fund to speed up transfer to Annuity payer. So everything seems to be OK now.

dunstonh

There is often a negative view on these forums to those within the industry and its nice to hear that your IFA is doing exactly what he should and that you are happy with him.

Be_Happy

UPDATE

Have just received lump sum and first monthly payment of annuity. This was a simple annuity claim using Open money option, but still took over three months.

Those retiring and depending on income from private pension fund should be aware of time delay and start annuity preparations well before date of retirement.