New pension drawdown products

dunstonh

BazzerPontefract wrote: »

I've spent a long time going through RL product documentation online - I don't have a RL plan, but I was thinking of transferring a plan in from a provider that won't offer UFPLS.
There's a discussion document there explaining the pros and cons of FAD and UFPLS, and another stating their commitment to offer both, but the product documentation goes nowhere to explaining the details. It seems to me that the commitment has been made by RL but the product documentation hasn't been updated to present the details.

Perhaps the issue for you is that you are looking for something new? They are not coming out with anything new. They are using their existing product (which has been available since around 2006ish).

For providers that already have a pension contract that offers drawdown within it, the changes are not significant.

zagfles

bmm78 wrote: »

Steve Webb suggested that we could see a decade of innovation in terms of new retirement products.

What we are more likely to see first though is a year of spin.

Well in terms of product there's not really a great deal of difference between the new rules and flexible drawdown, so no great innovation is really needed. It's just more people will be able to use it.

Innovation really is far more needed in the annuity market if they are to survive. As I mentioned a while ago I'd like to see a "delayed annuity" product, ie something you can buy at say 60 and pays an annual amount from say 85 (and nothing if you don't live to 85). Basically insurance against longevity, so people can plan their drawdown based on living to 85 but they have the annuity to fall back on if they live longer.

jem16

zagfles wrote: »

They are willing to negotiate charges, so someone with a total of £250k (the first "tier") would almost certainly be able to negotiate a discount, as we saw in the thread I linked above. 0.25% seemed typical, some got at low at 0.2%.

People only got these discounts by threatening to take their investments away from HL when they announced their new charges. I'm sure there are many who did not know to ask and are paying the high charge.

Why not offer the lower charge in the first place?

Their service is excellent and their charges aren't bad, in some cases they are the cheapest. Their reputation for being expensive isn't really deserved.

I'm not sure I agree on that. As you say for some their charges aren't bad but for many they are more expensive than elsewhere.

However charges shouldn't always be the only thing to consider and service does count for a lot too.

kidmugsy

zagfles wrote: »

As I mentioned a while ago I'd like to see a "delayed annuity" product, ie something you can buy at say 60 and pays an annual amount from say 85 (and nothing if you don't live to 85). Basically insurance against longevity, so people can plan their drawdown based on living to 85 but they have the annuity to fall back on if they live longer.

The Yanks call it a "deferred annuity". If I wanted to guess at possible new products, I might just look to see what's already available in the US, Canada, Australia, The Netherlands, and so on.

zagfles

jem16 wrote: »

People only got these discounts by threatening to take their investments away from HL when they announced their new charges. I'm sure there are many who did not know to ask and are paying the high charge.

Well of course. Same as any negotiation - you won't get very far with "lower my charges or I'll stay put"

Why not offer the lower charge in the first place?

Same reason as annuity providers offer lower prices to those who haggle. As recommended here.

I'm not sure I agree on that. As you say for some their charges aren't bad but for many they are more expensive than elsewhere.

However charges shouldn't always be the only thing to consider and service does count for a lot too.

Indeed.

zagfles

kidmugsy wrote: »

The Yanks call it a "deferred annuity". If I wanted to guess at possible new products, I might just look to see what's already available in the US, Canada, Australia, The Netherlands, and so on.

By the looks of it a "deferred annuity" isn't what I was on about, that seems to roll up the interest till you want it. More like a "longevity annuity", which was exactly what I was talking about see http://money.cnn.com/retirement/guide/annuities_longevity.moneymag/index.htm

kidmugsy

zagfles wrote: »

By the looks of it a "deferred annuity" isn't what I was on about, that seems to roll up the interest till you want it. More like a "longevity annuity", which was exactly what I was talking about see http://money.cnn.com/retirement/guide/annuities_longevity.moneymag/index.htm

Thanks; I'll bookmark that. Mind you, I don't fancy such a thing without inflation protection.

jem16

zagfles wrote: »

Well of course. Same as any negotiation - you won't get very far with "lower my charges or I'll stay put

Of course you won't. However many walked to the provider offering a better deal in the first place.

Many new investors will avoid HL in the first place as they are more expensive than most.

Chickereeeee

zagfles wrote: »

They are willing to negotiate charges, so someone with a total of £250k (the first "tier") would almost certainly be able to negotiate a discount, as we saw in the thread I linked above. 0.25% seemed typical, some got at low at 0.2%.

Not always. I had in excess of £300K with HL and theatened to leave unless they reduced charges. They didn't, so I did. It may have been because I had a number of ITs and shares, as well as funds, where they do not make so much money.

C

dunstonh

Chickereeeee wrote: »

Not always. I had in excess of £300K with HL and theatened to leave unless they reduced charges. They didn't, so I did. It may have been because I had a number of ITs and shares, as well as funds, where they do not make so much money.

C

Under their unbundled pricing (0.45% etc) the remuneration they receive has nothing to do with the assets invested in (unless you invest in HL own funds). The old method did have a bias to funds as it did with all bundled platforms. That was the reason for unbundling.