How to find a good annuity

Debutante

dunstonh wrote: »

Probably around £1000-£2000. However, the fee can be collected via the pension pot and the annuity then arranged on non commission basis. If you DIY it will be on commission basis. The firm you use will take around 3.5% commission. The IFA will likely be more expensive in your case but the annuity rates are likely to be higher.

Your £20k pot is below the ideal figure for an IFA. However, if you qualify for enhanced terms then that will more than make up for it.

Thank you for your help
I am going to see what I can achieve on my own and see how I get on and then I could contact an IFA and just ask him/her if they could better it. If there was a lot of money concerned of course I would seek professional help.
I think I would qualify for enhanced terms as I am a smoker.
I like the idea of an annuity linked to the stock market as this is not our main family pension because swmbo is a high earner so I can afford to be a bit more adventurous with these modest funds.

Edit - I notice you said that if I went diy it would be on a commission basis. I don't understand that. Surely if I approached the annuity provider directly then there would not be any commission charged/payable. If you have a moment would you clarify what you mean ?

jem16

Debutante wrote: »

I think I would qualify for enhanced terms as I am a smoker.

Then you really should be using an IFA as the haggling process usually gives the biggest increase.

Edit - I notice you said that if I went diy it would be on a commission basis. I don't understand that. Surely if I approached the annuity provider directly then there would not be any commission charged/payable. If you have a moment would you clarify what you mean ?

Even if you go direct to the provider, commission is still payable as it's built into the rate. They just keep it for themselves.

Debutante

jem16 wrote: »

Even if you go direct to the provider, commission is still payable as it's built into the rate. They just keep it for themselves.

Am I likely to be able to find an advisor who would do it for the commission only which would be win/win ?

Edit - I am not sure how the rules work on this forum but if there are any advisors reading this and would be interested in helping me (for the commission) please PM me.

jem16

Debutante wrote: »

Am I likely to be able to find an advisor who would do it for the commission only which would be win/win ?

No since January 2013 and RDR, advisers are not longer able to accept commission.

Dunstonh as already explained how the fee would be taken.

Edit - I am not sure how the rules work on this forum but if there are any advisors reading this and would be interested in helping me (for the commission) please PM me.

It's against forum rules for them to pm you. You can pm them and ask but as I said they don't work with commission any longer.

SallyG

"Even if you go direct to the provider, commission is still payable as it's built into the rate. They just keep it for themselves."
---- that's still "lawful" then? - even after RDR banned commission to IFAs , DIYers/direct sales customers still pay/forgo the commission?

Debutante

jem16 wrote: »

No since January 2013 and RDR, advisers are not longer able to accept commission.

Dunstonh as already explained how the fee would be taken.



It's against forum rules for them to pm you. You can pm them and ask but as I said they don't work with commission any longer.

Sorry to bombard everyone with so many questions but this is all new to me
Latest question : if the IFA cannot take the commission then who is it paid to normally ?
I have read Dunstonh post again and he says the firm that I use would take it so does that mean if I use a firm of IFA's then they get it but an individual IFA cannot get it .....

jem16

SallyG wrote: »

even after RDR banned commission to IFAs , DIYers/direct sales customers still pay/forgo the commission?

Correct - commission has only been banned on advised cases.

jem16

Debutante wrote: »

Latest question : if the IFA cannot take the commission then who is it paid to normally ?

Normally whoever set up the annuity. Before RDR IFAs could take commission.

I have read Dunstonh post again and he says the firm that I use would take it so does that mean if I use a firm of IFA's then they get it but an individual IFA cannot get it .....

He was talking about the firm you use to arrange the annuity - ie discount broker/provider.

If you use an IFA the IFA will take the fee.

DavidLaGuardia

SallyG wrote: »

"Even if you go direct to the provider, commission is still payable as it's built into the rate. They just keep it for themselves."
---- that's still "lawful" then? - even after RDR banned commission to IFAs , DIYers/direct sales customers still pay/forgo the commission?

RDR did not stop commission on non-advised sales. Some contracts, inlcuding annuties have retained commision in their cost to enable them to be distributed trough non-advised (execution only) channels.

If you use an IFA the cost of this commission is taken out and the cost of all or most of the agree IFA fee can be added in and paid by the provider. This is better than a separate fee as it is coming out of a taxable contract.

Though it's not a large pot, I am sure you can find an adviser who can add value and tell you about other options and how it fits in with any other planning.

Stompa

Debutante wrote: »

Are there any comparison type sites where I can try to find a company to buy the annuity from that will give me the best deal ? (or are all the annuity providers more or less the same ?).

http://www.pensionsadvisoryservice.org.uk/taking-payments-from-your-pension-pot/choosing-the-right-type-of-annuity

https://www.moneyadviceservice.org.uk/en/articles/retirement