Can existing annuity be cashed-in

jem16

Pincher wrote: »

Close enough, considering we are expecting long term low inflation, possibly even deflation.

Except as I showed later, it's actually 12 years which isn't close to 20 years at all.

Thrugelmir

Pincher wrote: »

Close enough, considering we are expecting long term low inflation, possibly even deflation.

Which if the annuity is increasing at 3% per annum compound. Isn't a bad return.

Pincher

Thrugelmir wrote: »

Which if the annuity is increasing at 3% per annum compound. Isn't a bad return.

I suspect it's index linked, rather than a fixed 3% per annum.

Emniht

Thanks ,they are gross figures

Emniht

The increase is fixed at 3%/Annum compound-whatever compound means.

jem16

Emniht wrote: »

whatever compound means.

It simply means that each increase is added to the previous amount including increase.

sleepless_saver

The government now seems to be actively considering letting people sell the annuities they have bought so the OP should keep an eye on developments.
http://www.bbc.co.uk/news/uk-politics-30670639

DaveMcG

sleepless_saver wrote: »

The government now seems to be actively considering letting people sell the annuities they have bought so the OP should keep an eye on developments.
http://www.bbc.co.uk/news/uk-politics-30670639

The whole concept is so messy that it could only be value for the buyer if the seller was being spectacularly ripped off.

dunstonh

DaveMcG wrote: »

The whole concept is so messy that it could only be value for the buyer if the seller was being spectacularly ripped off.

Plus, it will be interesting to see how they get around the trust rules and the complaints of mis-selling that will follow when the annuitant dies 2 months later and the income stops.

Steve Webb made comments not too long back about unwinding annuities. That was shot down. This seems to be a misguided attempt to try and revive it through the back door.

Pincher

Thrugelmir wrote: »

Which if the annuity is increasing at 3% per annum compound. Isn't a bad return.

Emniht wrote: »

The increase is fixed at 3%/Annum compound-whatever compound means.

Compounding should mean:


In 10 years time, the pay-out should be £430 (£320 x 1.03^10)


In 20 years time, £577 (£320 x 1.03^20)


If she lives to a hundred, £776 (£320 x 1.03^30)


In a low inflation environment, not bad.