Best provider for an enhanced annuity

bigfreddiel

As title suggests - I have £80-100k to purchase an enhanced annuity - how can I get some comparitive quotes and who from?

fj

dunstonh

I have done over a dozen enhanced annuities over the last 2 months and used multiple providers. There is no one best provider. Each has different underwriting criteria and pricing based on their own experiences. Plus, some are more open to haggling than others.

how can I get some comparitive quotes and who from?

A local IFA.

bigfreddiel

dunstonh wrote: »

I have done over a dozen enhanced annuities over the last 2 months and used multiple providers. There is no one best provider. Each has different underwriting criteria and pricing based on their own experiences. Plus, some are more open to haggling than others.


how can I get some comparitive quotes and who from?

A local IFA.

cheers dunstonh,

a. can you do one for me - outside of this forum?

b. why can't i do it myself? - ans: IFAs have accesses the public don't have i guess

c. i've used unbiased so i can find an IFA easily enough - been un-impressed by the IFA the civil service laid on at a retirement seminar tho!

Ans: don't be put off by one bad experience - try again and find one that suits.

d. I have hypertension, high cholesteol and Type 2 diabetes, age 60, male, both parents died of heart attacks at 57 and 67- so can you estimate what £80k would buy - i won't hold you to it!

cheers

j

dunstonh

a. can you do one for me - outside of this forum?

You can choose to use any IFA you like.

b. why can't i do it myself? - ans: IFAs have accesses the public don't have i guess

If a product provider decides to retail their product direct to public they have a few issues to overcome. 1 - they have to become regulated as a distributor/retailer as well as provider. That involves costs (regulatory cost, increased solvency costs, increased FSA,FSCS and FOS levies and staff costs). You also have to cater for the fact that the average consumer is rubbish at paperwork and wouldnt understand things like with/without overlap, or that Open market is usually for only one pension but you need immediate vesting personal pension when there are more than one pensions to take and that discharge forms need filling in and that you need proof of age to be provided etc.

So, to offer direct to public you need volume to make it cost effective and enhanced annuities typically wont give that volume. Plus, financial services works on economies of scale. The pricing direct (where it is available) is often less favourable than going via an IFA

c. i've used unbiased so i can find an IFA easily enough - been un-impressed by the IFA the civil service laid on at a retirement seminar tho!

That doesn't surprise me. IFAs that work with firms linked to the public sector or unions tend to be very poor. I cannot imagine any decent IFA wanting to work on that basis. They tend to suffer higher turnover and work on a sales like process.

d. I have hypertension, high cholesteol and Type 2 diabetes, age 60, male, both parents died of heart attacks at 57 and 67- so can you estimate what £80k would buy - i won't hold you to it!

I won't guess rates. I am lousy at it and never seem to get it right. £80k should see some good haggling though and get around 10% higher than the first annuity rates they give out.

Iancfp

I think 90% of annuity cases we have done over last 3 years have obtained enhanced rates which have ranged from a few % to nearly 65% higher income.

On the case where one provider gave 65% more income - another based on the same medical form gave no increase at all.

As it is not an exact science often Insurers will increase their initial quoted rates to beat a competitor - so this is exactly the territory for a good IFA

kidmugsy

Just out of interest: is this a pension annuity or a PLA that you are discussing?

bigfreddiel

kidmugsy wrote: »

Just out of interest: is this a pension annuity or a PLA that you are discussing?

PLA

cheers

fj

kidmugsy

I'd quite like to buy a PLA for my wife but I'll wait for a bit because (i) annuity rates might recover at some point, and (ii) I suspect that a cash-strapped govt will one day means-test the Old Age Pension. I am of the not very cheerful view that the Coalition hasn't fully appreciated the depth of the mess it inherited, and how much worse things are going to get.