How do I buy a Pension Annuity elsewhere?

KeithHarper

I've come to that age when I find out how much income I will get in retirement and wanted to know how I go about buying a Pension Annuity from a company. I would like to see if another company will give me more. Thanks

CannySaver_2

KeithHarper wrote: »

I've come to that age when I find out how much income I will get in retirement and wanted to know how I go about buying a Pension Annuity from a company. I would like to see if another company will give me more. Thanks

Hi

Shopping about for an Annuity is vitally important to ensure you get the best rate, your current pension provider may give you the best annuity, it is often the case that they don't though.

You essentially have two options:

1. Shop about yourself and then go direct to a provider, start by using a pension annuity calculator such as the one given in the link

2. Consult and IFA, get a recommendation from a friend or use www.unbiased.co.uk to find a suitable IFA

Remember that when you buy an annuity this is one time it will cost you nothing to take advice, going direct to the annuity provider just means they get a windfall as they keep the commission that they would have paid out.

Check also whether you qualify for an enhanced annuity, an IFA can help you with this.

This link might also be interesting:

http://www.!!!!!!.uk/technical-area/retirement/nine-questions-to-ask-your-annuity-adviser/

Hope this helps, let us know how you get on!

The Canny Saver

PS enjoy retirement, the garden and the golf course!

jem16

See an IFA to search the open market for you. Costs are usually met from the commission payment (or pay a fee if the pot is large enough) and an IFA will get a better deal than approaching companies directly.

dunstonh

As mentioned above, the use of an IFA is a no brainer. If you try going direct, you will not have access to the whole of market and the providers will just keep what they would have paid the IFA for doing it.

Plus, IFAs can often haggle up terms and get better than the normal retail price.

zygurat789

So I got some quotes, there was a range 5.4% to 6.45% but for Annuities Online, part of Mortgages Online, they were quoting 7.9% from the same company I had a direct quote of 6.45%. This seems to be too good to be true. Does anybody have any experience of them?

zygurat789

dunstonh wrote: »

As mentioned above, the use of an IFA is a no brainer. If you try going direct, you will not have access to the whole of market and the providers will just keep what they would have paid the IFA for doing it.

Plus, IFAs can often haggle up terms and get better than the normal retail price.

Actuall the one I approached wanted to charge me a fee.

CannySaver_2

zygurat789 wrote: »

Actuall the one I approached wanted to charge me a fee.

Was that because he was taking no commission?

Or was it because the fund was small and they needed to top up the commission to break even?

dunstonh

Actuall the one I approached wanted to charge me a fee.

Were they offering the annuity on nil commission terms (so the annuity rate was higher) or fee based but using commission offset?

Or maybe the fund was to small to be viable for an IFA to do it?


edit: Cannysaver beat me to it.

zygurat789

CannySaver wrote: »

Was that because he was taking no commission?

Or was it because the fund was small and they needed to top up the commission to break even?

Can't comment on the first point.
Four funds, two people £100K. I don't know how much commission that would generate.

zygurat789

dunstonh wrote: »

Were they offering the annuity on nil commission terms (so the annuity rate was higher) or fee based but using commission offset?

Or maybe the fund was to small to be viable for an IFA to do it?


edit: Cannysaver beat me to it.

Not mentioned

CannySaver_2

zygurat789 wrote: »

Can't comment on the first point.
Four funds, two people £100K. I don't know how much commission that would generate.

The commission he was taking should have been disclosed to you on an illustration, not doing so is a serios breach.

From my limited understanding I'd say it would generate commission of between £1k and £2k, depending on whether it was a normal annuity or an enhanced annuity.

More than enough I would have thought not to charge you a fee.

The Canny Saver