Laughable annuity quotes

mike004

MoneyWorry wrote: »

In 7 years, projections may be a lot different and I'll have other options open to me.

I have a feeling that projections will be even worse in 7 years.

This is the industry that mucked up traditional with-profits schemes and endowment mortgages so badly that no-one will touch them nowadays. But that's going off-topic.

mania112

C_Mababejive wrote: »

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.

Insurance company?

C_Mababejive wrote: »

Can anyone convince me otherwise?

Sounds like you've already made your mind up. But knowing 'GAD info' is far from the end of it.

mania112

Run your details through here and see what you come up with:

http://pluto.moneyadviceservice.org.uk/annuities

C_Mababejive

mania112 wrote: »

Insurance company?




Sounds like you've already made your mind up. But knowing 'GAD info' is far from the end of it.

Of course but do annuity companies know anything more about the best investments than someone who does their own research? At least the lump sum will always be your as will the returns generated. Once you give it up to some company,they have it for good dont they?

Of course we generalise and the op is only talking £15k

mgdavid

C_Mababejive wrote: »

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?

so you want the Drawdown option, self-administered then. Go for it...

Old_Slaphead

dunstonh wrote: »

Q from mike 004....How much does the insurance company typically make from the capital sum?

A....not a lot.

How do you know that and what is "not a lot" ?

C_Mababejive

mgdavid wrote: »

so you want the Drawdown option, self-administered then. Go for it...

I'm fine with my pension investments thanks

Stargazer57

Old_Slaphead wrote: »

How do you know that and what is "not a lot" ?

It's a competitive market with few barriers to entry. If the profits were large more companies would enter the market. (This knowledge is worth 100 Daily Telegraph articles).

jamesd

C_Mababejive wrote: »

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?

An insurance company can do something you can't do: pay you more based on the money that would have been paid to those who have died before you. This effect doesn't start to become really significant until sometime after age 75, when the death rates start to increase significantly.

On the other hand, you don't need the same guarantee of payout out 100% of the income that an insurance company must deliver, so you can take greater investment risk. Against that, you do have to allow safety margins to deal with the investment volatility for at least your core minimum income requirement. If you can get by on state pensions plus an investment income of say £30,000 in an average market and can live on £15,000 investment income you've a comfortable 100% safety margin and you'd be fine. Not so if you'd get £10,000 on average and dropped to £5,000.

Both drawdown and annuities can be useful, just takes exploiting their particular properties as appropriate for the situation.

Linton

C_Mababejive wrote: »

Of course but do annuity companies know anything more about the best investments than someone who does their own research? At least the lump sum will always be your as will the returns generated. Once you give it up to some company,they have it for good dont they?

Of course we generalise and the op is only talking £15k

The difference between you and insurance companies is that the insurance company MUST pay the guaranteed annuity no matter what happens to the stock market and no matter how long you live. You have the option to fail with your own financial arrangements. Also, insurance companies always have access to some useful investments that you dont - in particular government guaranteed inflation linked bonds.

As regards giving the money to the insurance companies - yes, in much the same way you give them your car or house insurance payment. Money goes from those who dont use the insurance (eg those who die early) to those who do (the 50% who live longer than average).