Annuity take the plunge - or not ?

Hafoi_Bin_Ereafower

As a newbie - Apologies if this has been discussed before but would really value the views of forumites as follows.

I heard Martin's views (Gabby Logan show) on the likely impact of the EU decision to equalise male/female values for annuities i.e. it would mean less for us blokes. Now we know it's two years away it does not seem too bad and things seem to have (short term) stabilised.

I've read though a few comments about improving rates through this year so can I ask those more experienced than me - is it worth hanging fire on my £100k annuity pension pot for a few months.

I don't need the income yet so could wait.

Velcro_Hotdog

If I were in your shoes I would get an annuity quote now and see what the monthly income works out at and do the following

Lets say taking it now gives you £100 pm
Taking in in 6 month may get you £110 pm
Made these figures up btw

Sounds great but you have just lost £600 income by waiting to gain £10 per month. But it is £10 per month for the rest of your life and it will only take 60 months to claw that £600 back.

Have a shop around on the web or speak to an IFA about what rates they can get you, don't forget that should you suffer from any medical conditions or you are a smoker you could get an enhanced rate.

dunstonh

I've read though a few comments about improving rates through this year so can I ask those more experienced than me - is it worth hanging fire on my £100k annuity pension pot for a few months.

Crystal ball job. Annuity rates improve when interest rates rise. So, that is what you are looking out for.

You could also hedge your bets and dont buy an annuity but go with the unsecured pension option instead.

Hafoi_Bin_Ereafower

Thank you both for response :T

Understand the initial cash loss versus ultimate gain if things improve - guess it's wether I think the BoE will raise interest rates soon and by how much.

Thanks again.

Loughton_Monkey

Annuity rates are based largely on long term bond yields. Don't fall into the trap of thinking that 0.5% increase in Base Rate automatically follows through as about 0.5% increase in annuity rates. It would be nothing like that.

However, obviously BR rises will put 'tension' on annuity rates to go up rather than down. Possibly worth hanging on for. Once they start going up, though, you'll still be worried about hanging on further, because everyone will say it's just the start......

That's life!

property.advert

Velcro_Hotdog wrote: »

If I were in your shoes I would get an annuity quote now and see what the monthly income works out at and do the following

Lets say taking it now gives you £100 pm
Taking in in 6 month may get you £110 pm
Made these figures up btw

Sounds great but you have just lost £600 income by waiting to gain £10 per month. But it is £10 per month for the rest of your life and it will only take 60 months to claw that £600 back.

Have a shop around on the web or speak to an IFA about what rates they can get you, don't forget that should you suffer from any medical conditions or you are a smoker you could get an enhanced rate.

One has to presume that any fund in cash is actually attracting interest to offset this with a higher amount to fund the annuity.