Is an IFA essential for purchasing an annuity?

jamesd

Yes, it's more of an issue for those reaching state pension age after the flat rate comes in. For those cases I may not be able to use the convenience of ignoring state pension increases year by year and might even have to project increases from inflation beyond the end of the deferring years.

sandsy

Meadowman wrote: »

When you say commission charge, does that mean a "setup fee" or just the fee a provider charges for selling you the annuity? Do you know the kind of amount they would charge an individual for that? It might follow that if I use an IFA I get hit for the IFA fee plus the provider's commission. Seems rather loaded against the consumer, really.

You either pay commission or an adviser fee, not both.

Commission is only payable when there is no advice involved. Any quote for an annuity you get on your £66k will already allow for the commission amount and will be shown on the quote.

An adviser fee is payable when advice is taken. It can either be paid:
A) directly to the adviser so you're full £66k is available for an annuity, or
from the £66k, leaving an amount less than £66k to be used to purchase the annuity.

Advisers can often access better annuity rates than individuals going direct which may offset the cost of advice when considered over a period of time.