Annuities anyone?

yangptangkipperbang

Tancred wrote: »

The best solution would be for the government to let people withdraw their entire pots tax-free. Then we could invest in anything we wanted

A luxury holiday in the West Indies ??? :rotfl::rotfl:

Nearly_Old

Gatser wrote: »

With Annuities being a total rip off (IMHO) is there any sign of a better alternative other than Drawdown.
What about fixed term annuities? are these a better alternative?

Surely it depends on what you want to achieve? In my case I was almost certain that I would use drawdown but, after discussions with my IFA, eventually took an annuity. Why?

I had the chance to retire in 2011 (age 62) so decided to seriosly look at the numbers. Our number turned out to be £26k and we had:

2 state pensions - my wife's starting Jan 13, mine April 14.
I had a deffered DB pension from when i worked in the public sector.
My wife had a public sector DB pension and she could retire in Sep 12.
I had built up a reasonable DC pension fund over the last 25 years.
ISA and non-ISA savings/investments.

First meeting with the IFA looked at the "Number" and we had a second, third and fourth look at it! Meanwhile the IFA looked at all our finances - pensions and other savings/investments. He had also discussed in detail what we actually wanted to do when we retired. Our IFA produced a very comprehensive report that showed both the drawdown and annuity options and again talked in detail about what we wanted to do in retirement.

Fortunately our index liked pensions just about equalled our "Number" so with my fund I took the 25% LS and a fixed rate annuity with a 10 year garauntee and 50% spouse benefit. We went this way so we can just get on with our lives and enjoy the time as we have a budget to work to. My wife did retire at the end of Sep 12, had a month at home before we had 5 weeks in the USA/NZ, back home for 2 weeks then flew off for Christmas. Now at home getting started on clearing the house, booking hotels for a 2 to 3 week european car trip (still to agree which car!) and looking at flights for going back to NZ, Cook Islands, etc probably Nov/Dec this year.

So yes rates may be poor and buying the annuity might not have been the correct choice for getting the "best" future income but for us it was the right choice to let us get with our plans and. hopefully, do the things we want to do.

jamesd

Thrugelmir wrote: »

Returns elsewhere i.e. cash, bonds. equities are low as well. So annuities may well come back where they belong.

Bonds and equities low!? Surely that should be high, except the limited cases of gilts and high quality corporate bonds? Even for gilts and high quality bonds it's been a good few years and equities did well last year and are off to a great start this one.

ermine

Tancred wrote: »

The best solution would be for the government to let people withdraw their entire pots tax-free. Then we could invest in anything we wanted (eg. property) to get a better return. Of course you always run a higher risk to get a better return, but there are ways of mitigating this.

That would be great. I'd back you all the way in achieving your desire. Provided you are also prepared to accept living under a railway arch if the risk shows up and hammers your investment return, rather than whinging that you are too poor to survive and can the rest of us sub you please. Basically what you want is to have the upside, but for taxpayers to underwrite the downside for you. No thanks.