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Laughable annuity quotes
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Old_Slaphead wrote: »How do you know that and what is "not a lot" ?
Insurance companies have been pulling out of the annuity market and there are only a handful left that still offer them. Even in house annuities are in decline. If it was so profitable, they would be falling over themselves to get a slice of the business.
Nowadays, it requires a critical mass to be profitable or offering dire rates instead. The Telegraph gave an example of a company that offers dire rates. Indeed, that company tries to get people to use its own in-house panel to put the annuity elsewhere. It gets around 1% of the pension pot (after tax free cash paid out) to do that. So, it clearly makes more money by selling someone elses annuity and getting 1% gross than it does offering its own annuity.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Mike is ranting about something here he clearly does not understand.
The fact is, the rate he quoted is laughably low, a true rate would be more than double.
Don't buy an annuity if you don't like them. gather your pensions together into larger pots and go drawdown.0 -
Mike is ranting about something here he clearly does not understand.
The fact is, the rate he quoted is laughably low, a true rate would be more than double.
Don't buy an annuity if you don't like them. gather your pensions together into larger pots and go drawdown.
The quote was for single life, 60.
360 per annum for a 15k pot is 2.4% of the capital.
I would have to live to be a hundred to "get my money's worth".
I understand all right.0 -
The quote was for single life, 60.
360 per annum for a 15k pot is 2.4% of the capital.
I would have to live to be a hundred to "get my money's worth".
I understand all right.
You dont understand because you have been told by several people that the figures you are quoting are too low.
For example, is that before or after tax free cash paid? With or without indexation? What level of death guarantees?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
The quote was for single life, 60.
Make your mind up. When asked the same question earlier you said;65 age of retirement.360 per annum for a 15k pot is 2.4% of the capital.
I would have to live to be a hundred to "get my money's worth".
I understand all right.
If you really do understand, which I doubt, you need to get your story straight.0 -
If you really do understand, which I doubt, you need to get your story straight.
Calm down Sherlock, it's no great mystery. I had to dig around and find the letter.
I understand perfectly that 2.5% return when the "banker" retains all the capital is shabby. Even some building societies give 2%. And you get to keep the capital.
Is that a straight enough story for you to understand?0 -
Run your details through here and see what you come up with:
http://pluto.moneyadviceservice.org.uk/annuities
And also try this and see if it improves matters.
Have you told us where the quote you have came from?0 -
Calm down Sherlock, it's no great mystery. I had to dig around and find the letter.
I understand perfectly that 2.5% return when the "banker" retains all the capital is shabby. Even some building societies give 2%. And you get to keep the capital.
Is that a straight enough story for you to understand?
Is that a flat rate or one which increases year on year, e.g. CPI/RPI/3% pa.
The money advice service calculator (posted by mania112) gives a good range of quotes, from 5 or 6 of the larger companies in the market. The flate rate is close to 5% pa..
OK, I put in some guestimated details based on what you said, if pension taken at age 60 with no drawdown of 25% tax free capital I get results of £1478pa for flat rate pension & £842pa increasing in line with RPI.0 -
I understand perfectly that 2.5% return when the "banker" retains all the capital is shabby. Even some building societies give 2%. And you get to keep the capital.
That's also one of the least commonly purchased annuities, in part because limited competition makes the payout relatively low and in part because most people prefer level annuities - something around 90% of all of those purchased - that start out paying twice as much and more.
But we're just guessing what you're quoting because you haven't said what annuity product is, just that it's an annuity of some sort.0
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