Are annuities really such a bad deal?

GingerBob_3

dunstonh wrote: »

Please provide details a bank account that provides a guaranteed interest rate for life at 2.5 to 4 times the current interest rates?

Bank accounts? None. But I didn't claim there were any. As stated earlier, I was using the bank account to illustrate the principle of giving up as against keeping your capital. Clearly such analogies are beyond the ken of some participants here. There are plenty of good places to put your money which give you a better rate than currently available from an annuity. If annuities are so good - as some here seem to imply - why did the share price of Standard Life et. al. fall through the floor following the chancellor's announcement.

Annuities for Dummies:

Give us most of that money you've put aside over the last 40 years, then we'll dribble some of it back you over the next 20 or 30 years. By the way, if you give us it on Monday then snuff it on Tuesday it's all ours. And ... if when you give us your money the market rates are bad, if they improve your rate stays bad.

GingerBob_3

Linton wrote: »

What are you talking about? £100,000 for things that other people are getting for free???? What things?

Invest in an annuity and you are buying an income stream. Invest in many other products and you're getting the income stream for free. Yes, generally with a higher level of risk, and to a certain extent variable, which is why I mentioned about having to manage your investment. Did you not know this?

Linton

GingerBob wrote: »

Bank accounts? None. But I didn't claim there were any. As stated earlier, I was using the bank account to illustrate the principle of giving up as against keeping your capital. Clearly such analogies are beyond the ken of some participants here. There are plenty of good places to put your money which give you a better rate than currently available from an annuity. If annuities are so good - as some here seem to imply - why did the share price of Standard Life et. al. fall through the floor following the chancellor's announcement.

Annuities for Dummies:

Give us most of that money you've put aside over the last 40 years, then we'll dribble some of it back you over the next 20 or 30 years. By the way, if you give us it on Monday then snuff it on Tuesday it's all ours. And ... if when you give us your money the market rates are bad, if they improve your rate stays bad.

You are ranting out of ignorance. A typical annuity rate at the moment at 65 is around 6%. So you get your money back assuming no return in about 16.5 years. Average life expectancy for a male aged 65 is about 85, rather more for a female.

Why do you want to keep your capital? When the time comes for you to knock at the Pearly Gates will St Peter be impressed by the fact that you still have £100K in your ISA?

GingerBob_3

Linton wrote: »

You are ranting out of ignorance. A typical annuity rate at the moment at 65 is around 6%. So you get your money back assuming no return in about 16.5 years. Average life expectancy for a male aged 65 is about 85, rather more for a female.

Why do you want to keep your capital? When the time comes for you to knock at the Pearly Gates will St Peter be impressed by the fact that you still have £100K in your ISA?

20 year life expectancy at 65? Only if you live in Harrow - less elsewhere (and don't live in Manchester). Didn't I tell you, I want to retire at 57, have an inflation-linked income and a widow's pension for my wife, who's 11 years younger than me.

Why do you want to keep your capital?

:rotfl:

[W]ill St Peter be impressed by the fact that you still have £100K in your ISA?

No, but my dependents might be. :T

Proxy

GingerBob wrote: »

If annuities are so good - as some here seem to imply - why did the share price of Standard Life et. al. fall through the floor following the chancellor's announcement.

Yes, oh boy. They really did suffer.

Standard Life share price at start of last Wednesday: £3.672
Standard Life share price now: £3.677

Good old upwards falling!

They did drop on Wednesday as the markets digested the information but soon bounced back when everyone got their heads back on.

Eric_the_half_a_bee

GingerBob wrote: »

Invest in an annuity and you are buying an income stream. Invest in many other products and you're getting the income stream for free. Yes, generally with a higher level of risk, and to a certain extent variable, which is why I mentioned about having to manage your investment. Did you not know this?

The next time you buy an income stream for free, please buy an extra one for me, and give me the income.

I will pay you £100 for every £1,000 of income. Pure profit for you, because these income streams are for free, aren't they?

p00hsticks

showmethehoney wrote: »

How rude you are and what tosh you write!

For over a decade I have been living on less than £5k and now about £3k. As I have said, I pay a mortgage and the council tax, plus utility bills and food out of that. I did give up the car, but don't really miss it anymore. I don't think I'm suffering, though I may be by your standards, and compared to the average person in the 1800's or many parts of the world today I'm living a live of unimaginable luxury.

I'm looking forward to being an OAP, I'll have more spare cash than when I was working. If a healthy average couple can't manage on £15,000 they need to take a look at their spending.

Anyway, the state pension - even the single tier pension - isn't designed to let you live in a manner that you would consider "comfortable". But it's enough to live on, if you want more you have had decades to make arrangements.

I know many people, for many reasons, will not have found life so easy and I'm not aiming my thoughts at them, but most folk should cope easily on a pension.

I'm smelling the coffee as I type; it's whatever instant was half price at the supermarket. It's hot and quenches my thirst. What more do I need?

The proposed state pension is £140 a week. Can I ask how much the cheapest rental property in your area costs and what percentage of the state pension that would be ?

I live in one of the cheapest places in the country and we are still talking £70-£80 a week for a modest rental. Council tax is around £20 a week, leaving £40 for the basics of electricity, gas, water, and food. That's before items like clothing, toileteries, travel, etc

Certainly not "coping easily" and impossible unless you include other benefits such as Housing Benefit/Allowance.

GingerBob_3

Eric_the_half_a_bee wrote: »

The next time you buy an income stream for free, please buy an extra one for me, and give me the income.

I will pay you £100 for every £1,000 of income. Pure profit for you, because these income streams are for free, aren't they?

If you're buying it, it's not free. Don't follow you. It's not what I said, anyway.

OK, let's have another go at this one:

Income by giving up capital as against (probably more) income by not giving up capital? Yes, No?

Anyway, away you lot go to the annuity shop, and good luck with it!

showmethehoney_2

GingerBob wrote [sorry, I edited out the opening "Quote"]

"Annuities for Dummies:

And ... if when you give us your money the market rates are bad, if they improve your rate stays bad."

And ... if when you give us your money the market rates are good, if they worsen your rate stays good. Those folk with a 15% annuity rate from a few years back must be laughing.

There was more but I find Linton has said it already. He's a wise man, you'd do well to listen to him.

Linton

GingerBob wrote: »

Invest in an annuity and you are buying an income stream. Invest in many other products and you're getting the income stream for free. Yes, generally with a higher level of risk, and to a certain extent variable, which is why I mentioned about having to manage your investment. Did you not know this?

What % steady income are you proposing to take from your investments? Is it more than 6%?