On-line IFA's and multiple pension pots

rollon65

Hello All,

Have posted here before on Annuity issues, but now that my end of May (2012) normal retirement date looms, I have a few further issues to air please.
I have three pension pots from which to raise an income from and have previously asked on-line for annuity quotations, but received none as the providers considered that I was too far away from my NRD for it to be worth undertaking.
I have promises of further approaches from them in April.
Assuming any actually materialise, I want to take a look at combining the three pots into a single annuity, but wonder if the amount of paperwork attaching to each would make a face-to-face assessment the obviously preferrable choice?
If anyone else has been in the same situation, some input on how it worked out would be very much appreciated.
I also feel a tad nervous about leaving things until April for my May retirement - it seems a little "eleventh hour" to me.
I am taking regular medication for osteo-arthiritis, but have never seen this affliction mentioned with regard to enhanced annuities, however I want to have a pension that makes a 50% provision for my wife in the event of my prior demise and my wife had a kidney with a tumour removed last year.
Would such an inherited pension still recognise and benefit from a clear case of a potentially life-shortening status, does anyone know please?

Would be grateful for any useful responses here.

Best regards, rollon65.

dunstonh

Assuming any actually materialise, I want to take a look at combining the three pots into a single annuity, but wonder if the amount of paperwork attaching to each would make a face-to-face assessment the obviously preferrable choice?

Multiple pots are a little more complicated as you cant use the open market option method but the immediate vesting personal pension method. However, posts by those that have used local advisers and online advisers to quote have found the local adviser has usually come in with a better figure.

I am taking regular medication for osteo-arthiritis, but have never seen this affliction mentioned with regard to enhanced annuities, however I want to have a pension that makes a 50% provision for my wife in the event of my prior demise and my wife had a kidney with a tumour removed last year.

Arthritis doesnt qualify but your wife's condition should.

Nearly_Old

I've just been through the process and started talking to my IFA last June/July as I was expecting to retire at the end of October. I had 2 pots split roughly 1/3rd / 2/3rd with different companies. Fortunately I didn't need income immediately so we spent a lot of time looking at the annuity vs drawdown question. Decided in the end to go down the impaired annuity route, 10 year guarantee, 50% spouse and no escalation - we each have a DB pension plus the state old age pension that are indexed and cover all our basic costs.

My IFA contacted the 2 fund holders and then went with the Open Market Option on the combined total. The fund holders have sent me the 25% cash lump sums separately (got the 2nd one today) and each of the fund holders has forwarded the remainder to the annuity provider. In the end I went with a company that does not deal directly with the public so I feel that my IFA has more than earned his (IMHO quite reasonable) fee.

rollon65

Hello guys,

I quite forgot how your structured and well thought out posting can get sucked into that "took too long" black hole here and my first follow-on has disappeared without trace.

Will leave this - just to let you know that I am coming back to you and will try to recreate it (copy and paste into a back-up Word document at the same time - all who have suffered a similar fate!).

Hopefully back in a bit! rollon65.

rollon65

[FONT=Arial, sans-serif]Hello again guys (this time with some backed-up keystrokes – still feel that my spontaneous original was better, but at my age I can't remember it chapter and verse!),[/FONT]

[FONT=Arial, sans-serif]Hope you are keeping well?[/FONT]

[FONT=Arial, sans-serif]Dunstonh: I have probably mis-interpretted you, but I have some bumph from each provider indicating that I am free to seek an OMO, rather than take their offers, so would appreciate a little expansion on why you feel that I may not be?[/FONT]
[FONT=Arial, sans-serif]Many thanks for your prompt indication that past performance puts the local guy ahead of the pack in terms of results.[/FONT]
[FONT=Arial, sans-serif]As an outcome of this, I did a bit of Googling and consequently happened upon some apparent bad stuff over allegations of malpractice against the on-line outfit that I had pencilled in to approach.[/FONT]
[FONT=Arial, sans-serif]I don't know the precise in's-and-out's of it all, but it was enough to set some alarm bells ringing.[/FONT]

[FONT=Arial, sans-serif]Nearly Old: [/FONT][FONT=Arial, sans-serif]M[/FONT][FONT=Arial, sans-serif]y wife spent a considerable amount of time as a “house mother” and as such is only able to contribute a shade less than the full state old age pension to the household coffers.[/FONT]
[FONT=Arial, sans-serif]Unlike yourself, I therefore need to immediately access the best near-term income that I can, in order to cover outgoings and have some disposable income, as there is a distinct question-mark hanging over our future together and we are both committed to enjoying the best of the rest of our years with our 4 grandchildren (whilst they still find it acceptable to be seen in our company!).[/FONT]
[FONT=Arial, sans-serif]As a precaution, I can't see any option to making provision for my wife to continue to receive 50% of my pension in the event of my own demise before hers, but in this case I shall be seeking an enhancement to acknowledge her own medical condition.[/FONT]

[FONT=Arial, sans-serif]Both responses truly appreciated – thank you,[/FONT]

[FONT=Arial, sans-serif]rollon65.[/FONT]

dunstonh

Dunstonh: I have probably mis-interpretted you, but I have some bumph from each provider indicating that I am free to seek an OMO, rather than take their offers, so would appreciate a little expansion on why you feel that I may not be?

Terminology. There are two methods used to purchase the annuity elsewhere. One is called open market option and the other is called transfer (or transfer to immediate vesting personal pension). They have different forms with most providers. If you have more than one pension then most providers (with a few exceptions) cannot use the open market option method. They have to use the IVPPP method. Some providers it is actually quicker to use the IVPPP method than the OMO method. e.g. Pru with their ridiculous 14 day limit on OMO forms but not transfer forms. They require new forms if you miss the date even if the figures are identical). The "Options" system used for pension transfers seems to be a bit faster than the OMO method as well. At least in my experience it is.

Generically, most people still refer to the overall thing you are doing as open market option. However, if you start asking for OMO forms from a provider when an IVPPP is needed, it will snag your application and create delays and confusion.

rollon65

Much appreciated dunstonh,

What in the layman's world might the (financial) difference be?

Have you just given me the good or the bad news please? (then off to bed with you, after the medicinal 12-year old night-cap, of course!).

Grateful thanks as ever - rollon65.

dunstonh

What in the layman's world might the (financial) difference be?

Depends on the amount but if you use OMO that would be two annuities. if you used IVPPP then they can do it on one and if the provider uses annuity rates that get better with higher values, then IVPPP can come in with higher than OMO.

e.g. 2 annuities of £40k each are based on pricing on £40k. 1 annuity of £80k is based on pricing of 80k.

Not all providers price that way or work that way. So, consider it a guide.

rollon65

Hello again dunstonh,

I have three relatively modest funds:

An Aegon PPP with a given January 2012 value of £85,520.

An Aviva PPP with a December 2011 given value of £30,876.

A Guardian Assurance Buy-Out Policy with a given January 2012 value of £31,137.

Pray tell me (if you can do it without beaking the house rules) - is that worth an IFA getting out of bed in the morning?

I am keen to get a fair shout and would like to avoid my "big" lifetime event becoming the dirt behind someone's finger nails.

Appreciate your help - rollon65.

dunstonh

Pray tell me (if you can do it without beaking the house rules) - is that worth an IFA getting out of bed in the morning?

Yes. Well within IFA range.

Also, the fact one of the plans is a section 32 buy out bond means you will have to use the IVPPP method as OMO is not available on those. They also need looking at closely as well as S32s often have transitional relief and guarantees that may be more valuable than initially realised (if you are looking at fund value alone).

rollon65

Not such good news tonight . . .

E-mailed the chosen local IFA last evening and as I post here, no response whatsoever.

Surely someone reviews e-mail on a daily basis and as a minimum, responds with a few well-chosen words just to keep their options open, if they are otherwise engaged?

Can't help reflecting that perhaps they don't really need my business after all?

rollon65.