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Can existing annuity be cashed-in

2

Comments

  • jem16
    jem16 Posts: 19,812 Forumite
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    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
    Thrugelmir Posts: 89,546 Forumite
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    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
    Pincher Posts: 6,552 Forumite
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    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
    Emniht Posts: 3 Newbie
    Thanks ,they are gross figures
  • Emniht
    Emniht Posts: 3 Newbie
    The increase is fixed at 3%/Annum compound-whatever compound means.
  • jem16
    jem16 Posts: 19,812 Forumite
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    Emniht wrote: »
    whatever compound means.

    It simply means that each increase is added to the previous amount including increase.
  • sleepless_saver
    sleepless_saver Posts: 2,741 Forumite
    Part of the Furniture
    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
    DaveMcG Posts: 173 Forumite
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    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
    dunstonh Posts: 120,935 Forumite
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    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.
    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.
  • Pincher
    Pincher Posts: 6,552 Forumite
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    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.
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