Annuity search

maljo

Can anyone tell me the best site they have found to compare annuities. Thanks

dunstonh

Past posters have consistently found that their local IFA has come in better than the figures used on quote sites. So, use a local IFA. Its a no brainer.

maljo

Ok thanks i will look for local IFA.

Nearly_Old

maljo wrote: »

Can anyone tell me the best site they have found to compare annuities. Thanks

I retired last October and was very glad that I used an IFA. I used a couple of the comparison sites to get an idea of what sort of pensions were available but at the time I was intending to head down the drawdown route. Discussions with the IFA over future lifestyle and taking into account other pensions, savings and investments made me reconsider and I went for an annuity.

The IFA then got me to complete quite a lengthy questionnaire that he sent to a number of annuity providers. Some annuity providers do not deal directly with the public so the only way to get quotes is through an IFA. After getting the results back the IFA went through them with me and then negotiated with two of them to get the best deal he could. It did take about 3 months (partly due to the Christmas period) but IMO it was worth it in the end both for the value of the pension and for the independent look at what future lifestyle I was hoping for.

Good luck and hope that you enjoy your retirement.

SallyG

Thanks for that Nearly Old -great to have your personal experience.
What scares me is the cost of the advice - what did you pay your IFA?
I don't know if this is allowed but as we live in the same area I can't resist asking: which IFA advised you?

dunstonh

What scares me is the cost of the advice - what did you pay your IFA?

Annuities typically pay 1%-2.5% to the firm you use for arranging them. Whether this is via the internet, direct to provider (where they keep the money for themselves) or using an IFA.

So, for most people, it is a no cost option to use an IFA. The only difference is that the IFA gets the commission instead of a website or a provider offering to you direct.

For larger pots, the IFA may well offer a discount if the commission is large. That increases the annuity rate further.

Nearly_Old

SallyG wrote: »

Thanks for that Nearly Old -great to have your personal experience.
What scares me is the cost of the advice - what did you pay your IFA?
I don't know if this is allowed but as we live in the same area I can't resist asking: which IFA advised you?

The IFA charged 1% of the net fund value; i.e. the value after the 25% tax free cash had been deducted. I will PM you the details rather than put them in a public post.

srcandas

I registered with 2 or 3 sites to get an idea of annuities. One actually called me while I was looking at the site (I could have put in a non tel no. I guess and still used the quote engine ) but to be honest they were very soft sell.

Interesting the difference in charges. If we take £100k pot presumably the 1% would be £750 (assuming 25% tax free lump). But Dunston is saying that a commission of 1 - 2.5% (£750 - £1875) is around.

So is it worth negotiating with several IFAs?
And if you do not like the offering do you still pay?
Or was the 1% for the life planning perhaps?

I met an IFA last week but he wouldn't give me the price, or even a charging basis, for anything. Very frustrating so thanks for the input 'Nearly old', and Dunston as always (brain the size of a planet that man - but certainly not paranoid ) :beer:

dunstonh

So is it worth negotiating with several IFAs?

Possibly depending on the amount involved.

And if you do not like the offering do you still pay?

Depends on whether you go fee basis or commission basis. Fee basis can mean many models and some will charge you for stages in the process. Others will charge only on completion.

CannySaver_2

Hi

I'm coming a bit late to this thread but personally I would follow something like this process:

1. Use an online pension annuity calculator such as the one in the link to get an idea of what a normal annuity will get you, an how much difference the various options will make to your starting level of income. I always believe in doing some of my own research whenever I'm buying a major purchase, don't like to be hoodwinked or not understand the conversation

2. I'd then speak to a couple of IFAs, perhaps a national firm and one local (www.unbiased.co.uk) to get quotes. When doing this I would expect to be talked through the various other options available to me e.g. Income Drawdown, Fixed Term Annuity etc as well as find out whether I qualify or not for an Enhanced Annuity

3. I would then ask the IFA to get me their best quotes. If my fund is large enough, probably £100k plus, I would ask the IFA to (a.) haggle with the Annuity provider and (b.) give me a deal on the commission, although to be fair the fund may have to be larger than this for them to start reducing their commission, I suppose it all depends on the percentage they get

4. I would look to openess and honesty from the IFA, not telling me their fee structure as was posted in the thread would put me off, probably so much that I'd walk in the opposite direction

5. I also want to like the person I'm doing business with (I'm funny like that) so that would be a consideration for me too

Hope this helps.

The Canny Saver

srcandas

Tx Canny. Seems a good plan but my position is:

About £80000 pot has guaranteed GARs. So I'll use 25% to clear mortgage and the rest as annuity (9.3 to 9.8 so unlikely to beat it looking around).

That leaves £100k pot of which I might take 25% lump leaving 75k. Now I like the idea of capped draw down* but I'd like to compare the best annuity I might get (esp. as if I cash in my CDD later I cannot see annuities being cheaper in the future).

[* I have an ongoing company and thus job, I will not draw for a few years leaving it invested, and will be further investing in wife's SIPP (for next 10 years) so have room to play.]

Taking action one above I get a good idea of what might be offered.

However would I be right in thinking that even with an IFAs best efforts I'm not going to beat the top offer by 5% more pension ??? I know if it was five percent that over many years that would be a considerable amount so the IFA costs would represent a good investment. It might also be enough to tempt me away from CDD.

I don't smoke, drink heavily or have any health issues so that is not a factor - touch wood

The other issue that confuses me is that if I pay an IFA the commission still exists. So unless I get it as increased pension where doese it go?