Laughable annuity quotes

Old_Slaphead

FatherAbraham wrote: »

An article in the personal finance section of a national newspaper proves nothing.
FA

Maybe not but unless you're a member of the company's audit team (and even then, it's easy to deceive auditors) it's probably the best you'll get.

mike004

FatherAbraham wrote: »

No, they offer fair value for money.

The apparently low rates (I'm talking about general market rates, not the incredibly low rate which you opened this thread with) merely reflect the mortality of modern annuitants.

FA

Aren't annuity rates also tightly linked to gilt interest rates and the wider economy?

Do you work in the personal finance sector, by any chance?

dunstonh

Old_Slaphead wrote: »

While there's no doubt that Insurance Cos make a more that decent return on annuity provision

http://www.telegraph.co.uk/finance/personalfinance/pensions/9919183/Pensioners-being-ripped-off-by-profit-margins-on-annuities.html

the chief protagonists in this debacle are the Government, who have so little respect for private provision, the B of E with it's QE policies and the bankers & Labour Party for effectively bankrupting the country.

That article is flawed. Standard Life are not active in the provision of annuities via the open market option. Their pricing is typically dire and way down the list (often bottom). So, using them as an example of typical is flawed.

FatherAbraham

mike004 wrote: »

Do you work in the personal finance sector, by any chance?

If I did, I'd probably be stoking your irrational hatred of a fairly simple, venerable and cheap product, the lifetime annuity, to encourage you to take some far more expensive and complicated doo-dad which would earn me far higher fees.

Warmest regards,
FA

dunstonh

mike004 wrote: »

Well, IFAs spring to mind...

Don't you see my point that annuity providers are walking off with a very large chunk of people's hard earned pension pots?

No I do not see your point. You are quick to shout rip off on things you do not understand and it appears you do not want to understand. You also don't appear to be reading many of the responses or rather you ignore the bits which show you are mistaken as it doesnt suit your rip off rant.

Annuities are certainly not perfect but whereas can you get 5-7% p.a. guaranteed for life. If you dont want the guarantee and want the potential for more than use a different option.

FatherAbraham

FatherAbraham wrote: »

If I did, I'd probably be stoking your irrational hatred of a fairly simple, venerable and cheap product, the lifetime annuity, to encourage you to take some far more expensive and complicated doo-dad which would earn me far higher fees.

Warmest regards,
FA

Ahem.

Just to clarify, that's not an attack on respectable IFAs, just a reaction to the endless stream of drivel I've been getting from, in particular, Lardgreaves Handsdown as the end of the tax year approaches.

Warmest regards, and a happy new tax year to everyone,
FA

mike004

dunstonh wrote: »

No I do not see your point. You are quick to shout rip off on things you do not understand and it appears you do not want to understand. You also don't appear to be reading many of the responses or rather you ignore the bits which show you are mistaken as it doesnt suit your rip off rant.

You're the one who is ranting.

Some obvious questions occur to me about annuities:
For an 100k pension pot, what is the average amount left on death?
How much does the insurance company typically make from the capital sum?

MoneyWorry

mike004 wrote: »

You're the one who is ranting.

Some obvious questions occur to me about annuities:
For an 100k pension pot, what is the average amount left on death?
How much does the insurance company typically make from the capital sum?

Some people may die early, but conversely there will be others who live past 100, all with annuities in place. No insurance company is going to manage your pension for nothing.
I have a projection from SL that in 7 years time, the pot will be £135000 and this will only give me £3590 pa. Yes, it's dire and it nearly shortened my life when I read it.
But you have to have common sense. In 7 years, projections may be a lot different and I'll have other options open to me.

dunstonh

You're the one who is ranting.

I'm not the one that is having multiple people take issue with that they are saying.

For an 100k pension pot, what is the average amount left on death?

Depends on the death benefits purchased.

How much does the insurance company typically make from the capital sum?

not a lot. The margins are low which is why most insurers have pulled out of the market. It can be profitable on volume and the larger the annuity pool a company has, the more profitable it can be providing they get their actuarial projections correct.

I have a projection from SL that in 7 years time, the pot will be £135000 and this will only give me £3590 pa. Yes, it's dire and it nearly shortened my life when I read it.

Remember that the product provider (SL) will be using below market annuity rates in those projections. They will also have many of the options included which hit the annuity rate. In reality, most people wont go with many of those options. It is better to under project and come in with more though rather than the other way around.

C_Mababejive

I am no expert and i realise there are financial gurus on board who know plenty more than i do about such things but put simply,,if i have a pension pot and know how to use GAD info, i can make my own decisions and so surely if i keep my pot and make my own decisions, i am better off and more secure than giving my pot to some insurance company (for them to meter it back to me) whos raison d'etre is to make profit and not to act as some kind of social service.

Can anyone convince me otherwise?