Annuity shock

Sagwala

I am 65 and trying to sort out a few affairs. Ten years ago I drew down 25% of my pension pot. Approx 27k. I have since been paid about 400 pound in pension but this forms part of my P60 and gets taxed accordingly.

Naively, or perhaps misinformedly, I was under the impression that this money was being given paid on the basis of profitable investment from my collateral. I always had in mind about a 60k approx further drawdown when I retire.

Now for the shock, for me anyway, the collateral is actually an annuity which was converted when I drew the original 25% and although having this £400 per month for life, I have no collateral.

I have no recollection of this discussion with Standard Life, was not given any option of better buying an alternative product or my health discussed which at the time I had and have type 1 diabetes.

They have told me that as of current Gov. Regs. that is it and nothing can be done.

I feel totally shocked and completely misinformed and ripped off by Standard Life!

Any advice or experience would be appreciated.

atush

You bought an annuity, period.

westv

In the 10 years since you bought it have you had nothing to indicate you have an annuity?!

Sagwala

atush wrote: »

You bought an annuity, period.

Thank you.

Sagwala

westv wrote: »

In the 10 years since you bought it have you had nothing to indicate you have an annuity?!

Not really no.

dunstonh

Now for the shock, for me anyway, the collateral is actually an annuity which was converted when I drew the original 25% and although having this £400 per month for life, I have no collateral.

10 years ago, the documentation issued contained the risk warnings that there is no further pension value. Also, 10 years ago, drawdown was in its infancy and was really only used by wealthy consumers who had IFAs.

I have no recollection of this discussion with Standard Life, was not given any option of better buying an alternative product or my health discussed which at the time I had and have type 1 diabetes.

You wouldn't have had a discussion with Standard Life as they didnt have anyone to call round your house back then. You were also given the option of the open market option and to seek advice via an IFA. So, either your recollection has drifted since then or you chose not to for some reason.
1 - Standard Life didnt offer enhanced terms on their annuities
2 -Standard Life only retailed Standard Life products.
3 - I just had a look at some Standard Life commencement paperwork from that period and it mentioned the open market option and that you should seek advice. It sounds like you did neither.

I feel totally shocked and completely misinformed and ripped off by Standard Life!

Strange you should feel like that as Standard Life did not misinform you. It sounds like no-one informed you and you never asked anyone to inform you. Instead, you bought the product they offered as priced without checking if you could get better or different elsewhere. That is not the fault of anyone else I'm afraid.

Also, it should be noted that your fund after tax free cash at commencement was under £100k. Back in 2006, drawdown was only deemed suitable by the regulator for £100k plus funds or where there was significant other guaranteed income. So, you would have ended up in an annuity whatever you did. The only difference is that had you done the open market option via an IFA, you would have got a higher income.

Sagwala

Thank you an informed response. What about getting a higher income due to being diabetic?

[Deleted User]

sagwala wrote: »

Thank you an informed response. What about getting a higher income due to being diabetic?

After 10 years payment? Don't think it works that way ......

RickyB2000

Unfortunately, the ship has sailed on this one. Why did you think £60k? 25% at £27k means around £80k - or total pot of £108k 10 years ago.

greenglide

Thank you an informed response. What about getting a higher income due to being diabetic?

The normal enhanced annuities are for type 2 diabetics, aren't they?

Type 1 diabetics are totally different but I must admit I do not know what the difference in life expectancy between type 1 and type 2 (my wife is type 1 diabetic).

bigfreddiel

Sympathies sagwala, unfortunately you were taken in by a financial institution, salesman probably, who didn't explain what was happening, so now some many years later you're somewhat screwed. I was taken in by one many years ago but I was too naive to understand why he was the number one salesman. Luckily I didn't suffer too much.

So the lesson is be on your guard, ask loads of questions, keep asking if it isn't explained. Sadly people will say it's all your own fault for not asking the right questions or reading the documents but there you have it. Lesson learnt, till the next time. Good luck

Cheers fj