Annuity advice

gadgetmind

BLB53 wrote: »

gilt yields are the lowest for many years.

The last couple of weeks have been interesting.

http://www.bloomberg.com/quote/GUKG15:IND

dunstonh

(He said we would need to pay him the £800 ish as it couldn't come from the pot - not that this would be a problem, depends on which option is the best?

Until around December time it was not clear how annuities would be treated under the RDR. However, they do allow it to come from the pot just as commission did. It maybe his own firms preference to only pay by cheque.

(He seemed to indicate that if I received any form of advice he would have to charge me, however he did say he had contacted Equitable the day before to obtain a quote?)

Nothing prevents him doing what I said. The bottom line of RDR is that the remuneration and service is agreed. What the remuneration is or what the service is does not matter (obviously within compliance). It may be that you should consider asking another local IFA.

Is it also true that Annuity Rates are not good at the moment and should I consider holding back for a short while?

Possibly. However, our compliance and research department has warned that annuity rates could still fall further. That may or may not happen as with predictions, it is very difficult to call these things. However, there are still downward pressures on the annuity rate.

and clearly stated that neither Equitable or Canada Life would be making a charge if I took the annuity with Canada Life, only if I was to receive/use HL

. So I am unclear about this statement.

They are not charging you explicitly. They have agreed commercially at corporate level what Canada Life will pay Eq life. It may be a annual fixed fee or whatever but its Canada Life paying Eq Life directly. However, they set the annuity rate reflecting the deal.

jem16

beansy wrote: »

(It just so happens this is HL shhh)

Perhaps see a local IFA who might be able to give you a quick quote? He/She might have a better rate than HL.

Is it also true that Annuity Rates are not good at the moment and should I consider holding back for a short while?

Do you need the income just now?

The other option, if you have £20k from your occupational pension plus the state pension, is to use Flexible Drawdown.

beansy

jem16 wrote: »

Perhaps see a local IFA who might be able to give you a quick quote? He/She might have a better rate than HL.



Do you need the income just now?

The other option, if you have £20k from your occupational pension plus the state pension, is to use Flexible Drawdown.

Not really as i am getting my occ ppension now which is £9200 pa but I dont qualify for my state pension for another 3 yrs but i am looking for a p/t job until then. Was wondering about income drawdown but dont think my pot is big enough. In my little brain the logic of having a pot of money with £45000 in and drawing out. £2000 pa in mthly instalments would last 22+ yrs before the pot was empty, if only it was that simple lol.

I have taken your comments onboard and made an appt with a local IFA for next mon. Need to fill in a health questionnaire before we meet and he said no costs involved until he obtains a quote and i accept it so cant say fairer than that and hubby is coming too to discuss his avc and we will consider some options for my lump sums while we are there.
Will update thread after the mtg but in the meantime thanks to all who have contributed to this thread.

BLB53

In my little brain the logic of having a pot of money with £45000 in and drawing out. £2000 pa in mthly instalments would last 22+ yrs before the pot was empty, if only it was that simple lol.

The idea of drawdown is the remaining 'pot' generates a return to cover the amount withdrawn.

A comfortable return on £45K would be £1,800 pa @ 4% which could be paid quarterly if desired.

At that rate, the arrangement could go on indefinitely as the 'pot' would always remain in tact.

The benefit would be having the option of some income before retirement/state pension and, at a later date, possibly take an annuity when rates are more favourable and you are older.

beansy

BLB53 wrote: »

The idea of drawdown is the remaining 'pot' generates a return to cover the amount withdrawn.

A comfortable return on £45K would be £1,800 pa @ 4% which could be paid quarterly if desired.

At that rate, the arrangement could go on indefinitely as the 'pot' would always remain in tact.

The benefit would be having the option of some income before retirement/state pension and, at a later date, possibly take an annuity when rates are more favourable and you are older.

Now i really like the sound of that.

To be honest with the interest on std savings accounts being quit poor if it wasnt for the fact my fund value could drop just as I want to trsfr into an annuity I would consider leaving it but as has been said wouldnt we all be better ofif if we had that crysral bal!

Have enough money to live on until receipt of state pension, cash isa's maxed, utilising a number of good rate mthly reg saver accs (from mse) and looking for a longer term home for my LS. Hubby still working but reduced his hrs to 4 days pw until he can take his occ pension without the reduction but his pay is awful for what he does but he enjoys it and cant be bothered of changing now.

So if drawdown was an option would the IFA go over this option with us?
Don't get me wrong I am aware it is a very good problem to have and we are very fortunate to be in this position but having worked since I was 15 with very little time off it has paid dividends now.

thanks for all the good advice

jem16

beansy wrote: »

Not really as i am getting my occ ppension now which is £9200 pa but I dont qualify for my state pension for another 3 yrs

The reason I was asking about the £20k is that there are two different types of drawdown. One is capped drawdown which is what BLB53 has explained. The other is Flexible Drawdown and for this you need to have at least £20k in secured pension payments - ie your occupational pension plus state pension. If you did have this amount, you can drawdown as much or as little as you like each year whereas with capped it has a maximum limit. However as you don't have £20k Flexible Drawdown isn't for you.

beansy wrote: »

Have enough money to live on until receipt of state pension, cash isa's maxed, utilising a number of good rate mthly reg saver accs (from mse) and looking for a longer term home for my LS. Hubby still working but reduced his hrs to 4 days pw until he can take his occ pension without the reduction but his pay is awful for what he does but he enjoys it and cant be bothered of changing now.

If you have no need for the annuity just now, why take it?

So if drawdown was an option would the IFA go over this option with us?

He should discuss all of the options available to you, provided you don't go in with the "I want an annuity and nothing else" line.

beansy

jem16 wrote: »

The reason I was asking about the £20k is that there are two different types of drawdown. One is capped drawdown which is what BLB53 has explained. The other is Flexible Drawdown and for this you need to have at least £20k in secured pension payments - ie your occupational pension plus state pension. If you did have this amount, you can drawdown as much or as little as you like each year whereas with capped it has a maximum limit. However as you don't have £20k Flexible Drawdown isn't for you.


If you have no need for the annuity just now, why take it?

Thanks again jem16

The person I spoke to at Equitable Life basically said if I don't take it now I will lose out as it will be frozen and the monthly income I could have received will just not be paid! I realised that but suggested that there was a chance the value could increase but she didn't seem to endorse this and left me rather confused. Through asking questions on MSE I now know the advice she gave me was incorrect but I doubt she was representing Equitable, just her own views!!


He should discuss all of the options available to you, provided you don't go in with the "I want an annuity and nothing else" line.

Thank you I have to send him some information tomorrow so I will suggest to him that we are looking for information on whatever options may be available to us!

:rotfl: