Purchased Life Annuities: some basic questions

CannySaver_2

dunstonh wrote: »

The 5% income is insured. So, if the capital runs out, it will continue. There are a few variations of a theme with different providers.

Any more details you care to share? Product names? Provider names?

jamesd

As dunstonh has written, you can do far better than a normal purchased life annuity. You can also get 100% pension for a spouse at no extra cost if you take income from investments instead of buying any annuity. In a few years, using S&S ISA allowances, that can be completely tax free income. It's the sort of thing that any IFA could easily set up for you, explaining about capital value variations and how things are arranged to hit your target for worst likely decrease in capital value in a bad year (specify 20% to 30% if you can, that'll maximise income). The bad years recover in later years, so it's just a case of picking a value that won't worry you too much. The IFA can target any value - even 10% or less, using a mixture of investments, cash savings and other products. That way you won't be reliant on just one provider but will instead have a range of income sources, all independent.

A PLA can be handy for some reasons, just likely to be better deals around. That's in part because people buying a PLA tend to be in unusually good health and payouts reflect the long life expectancy.

bigfreddiel

CannySaver wrote: »

Any more details you care to share? Product names? Provider names?

ditto - i would like some actual examples from dunstonh - but i doubt he will

CannySaver_2

bigfreddiel wrote: »

ditto - i would like some actual examples from dunstonh - but i doubt he will

Agreed, some examples of product provider names and more details would be very useful.

Dunstonh, care to share more with us?

The Canny Saver

bigfreddiel

CannySaver wrote: »

Agreed, some examples of product provider names and more details would be very useful.

Dunstonh, care to share more with us?

The Canny Saver

Well there you have it - people say they know how to invest and so on - but when you ask for hard facts they clam up

I'm thinking no some very regular posters on here who I believed are atually just having a laugh by their noticable absence when pressed for hard facts

not a problem for me - tho' i'm happy with my returns at the moment.

bigfreddiel

dunstonh wrote: »

Generically, the PLA can sound like the perfect option. However, commercially, the annuity rates available are usually very poor and you can get guaranteed income products paying better rates a lot of the time.

I did a case like this recently and the main requirement was an income for life. The PLA rate was lower than a guaranteed 5% net for life income investment product (100% joint) and the potential investment capital to be returned (subject to investment returns allowing) you can.

Just to make life a bit easier fill the blanks:

guaranteed income products paying better rates are:_________________

I did a case like this recently and the main requirement was an income for life so I recommended:___________________________


looking forward to the answers

fj

CannySaver_2

Hi

Dunstonh, any reason for your silence on this topic? Do put us out of our misery!

Bigfreddiel, I've been thinking about what sorts of investment contracts have "The 5% income is insured. So, if the capital runs out, it will continue" and I'm coming up a blank.

An Investment Bond doesn't fit as the 'income' is return of capital and if the value of the bond fell to zero then the income would stop. It clearly isn't an ISA, Unit Trust or OEIC.

My guess, and I could be wrong, is therefore that it is some form of Structured Product or Third Way Annuity product (I believe Met Life have such a contract). Structures generally have a maturity date though which would mean the income could not continue for life, I therefore think it is more likely to be the Third Way Annuity but who knows.

The Canny Saver

browniej

CannySaver wrote: »

Hi

Dunstonh, any reason for your silence on this topic?

Perhaps he feels - quite rightly in my opinion - that he has given some information that alternative products are available and it is now down to anyone who wants to take it further to seek the advice of an IFA or do their own research.

CannySaver_2

browniej wrote: »

Perhaps he feels - quite rightly in my opinion - that he has given some information that alternative products are available and it is now down to anyone who wants to take it further to seek the advice of an IFA or do their own research.

He may well do, however this is a board where opinions are exchanged, questions asked and answers suggested.

I do not see a problem with asking a poster to expand on a product which could well be interesting for other posters.

The Canny Saver

atush

Or you could be just looking for some free unpaid advice lol.

Personally I like that industry professionals come here and try to help out. But for their trouble, they either get attacked for being what they are, or get snarky comments because they won't do free consultations.