Agency commission

bmm78

Just Retirement are not on the Cavendish restricted "panel". Neither are the other top enhanced annuity providers. If Just Retirement are top, Cavendish will not be able to get you the best rate on the market.

There is also no opportunity to increase the rate by haggling. It is often possible to squeeze more income out of the top enhanced providers. Also, plenty of other brokers offer cashback, not just Cavendish, and don't have the limitation of only offering rates from a few providers.

If LV and Aviva rates (which are on the Cavendish panel) are close to Just Retirement the reduced cost may make up the difference. Generally speaking though, the provider rate is the primary consideration, and the broker cost second. Does vary from case to case though - as per the previous post, annuity rates aren't always intuitive. In your case there is a huge amount of commission to play with, so it may have more of an impact than the typical case.

Using a cheap-as-chips service from a limited panel can be a false economy. No harm in giving Cavendish a try, but the Telegraph article and the Cavendish website in my opinion don't clearly explain the limitations of the service.

zagfles

bmm78 wrote: »

Just Retirement are not on the Cavendish restricted "panel". Neither are the other top enhanced annuity providers. If Just Retirement are top, Cavendish will not be able to get you the best rate on the market.

Indeed - which is why the OP should get quotes from other sources as well.

There is also no opportunity to increase the rate by haggling.

It's perfectly possible for people to haggle themselves, as we've seen here https://forums.moneysavingexpert.com/discussion/4846538

It is often possible to squeeze more income out of the top enhanced providers. Also, plenty of other brokers offer cashback, not just Cavendish, and don't have the limitation of only offering rates from a few providers.

If LV and Aviva rates (which are on the Cavendish panel) are close to Just Retirement the reduced cost may make up the difference. Generally speaking though, the provider rate is the primary consideration, and the broker cost second. Does vary from case to case though - as per the previous post, annuity rates aren't always intuitive. In your case there is a huge amount of commission to play with, so it may have more of an impact than the typical case.

Using a cheap-as-chips service from a limited panel can be a false economy. No harm in giving Cavendish a try, but the Telegraph article and the Cavendish website in my opinion don't clearly explain the limitations of the service.

Yes, so getting quotes from multiple sources, as with anything you buy, is surely the way to go. Use Cavendish, other annuity discount brokers, and IFAs, and see who gets you the best quote.

SallyG

Can't resist asking whether you've considered and rejected doing income drawdown - maybe because there's no " enhanced" version?

peaksoft

SallyG wrote: »

Can't resist asking whether you've considered and rejected doing income drawdown - maybe because there's no " enhanced" version?

I have considered this, Sally, and while it's superficially attractive, there seem to be quite a few recurring management charges that argue against it. I'm not actually desperate for the income, so in theory it would suit me, if I could be convinced that the funds would be invested productively.

peaksoft

jem16 wrote: »

Do let us know what Cavendish quote you as it will help others.

However be aware that the article does say this;

I've used Cavendish's on-line tool today, and LV- would give me virtually the same income, PLUS I would get £3,000+ tax-free from Cavendish.

dunstonh

peaksoft wrote: »

I've used Cavendish's on-line tool today, and LV- would give me virtually the same income, PLUS I would get £3,000+ tax-free from Cavendish.

Why would you get £3000+ tax free from Cavendish? If Cavendish are doing them commission free then the terms would be better but nothing rebated.

I would be more concerned at that lack of the main players. LV rarely come out top on whole of market selection and after haggle, are usually miles behind.

bmm78

peaksoft wrote: »

I have considered this, Sally, and while it's superficially attractive, there seem to be quite a few recurring management charges that argue against it. I'm not actually desperate for the income, so in theory it would suit me, if I could be convinced that the funds would be invested productively.

There is a growing market of products in between annuities and drawdown, which aim to provide some of the features of both. If drawdown is superficially attractive but you are leaning towards the annuity, it is well worth considering Fixed Term Annuities, Flexible Annuities or Asset-backed Annuities.

jem16

peaksoft wrote: »

I've used Cavendish's on-line tool today, and LV- would give me virtually the same income, PLUS I would get £3,000+ tax-free from Cavendish.

If that's the case then you are still paying 1.5% commission - it's just hidden in the lower rate. What rate would it work out as?

What you need to see is an IFA or whole of market FA who will get a higher rate with no commission. You can then decide to pay the fee directly and keep that higher rate or pay the fee via the pension and reduce the rate.

zagfles

peaksoft wrote: »

I have considered this, Sally, and while it's superficially attractive, there seem to be quite a few recurring management charges that argue against it. I'm not actually desperate for the income, so in theory it would suit me, if I could be convinced that the funds would be invested productively.

There are plenty of providers who do drawdown for very reasonable charges, and where you can choose exactly what to invest in, if you happy to do so.

See http://www.comparefundplatforms.com/compare2.aspx

Snowman's spreadsheet for platform charges:

http://forums.moneysavingexpert.com/showpost.php?p=64540489&postcount=15

We also did one for drawdown charges which are on top of the above, see
https://forums.moneysavingexpert.com/discussion/4922919