Tendering your pension?

skipper65

Hi
Someone has told me today, that you can Tender your pensions to get a better rate? Has anyone ever done this & how do you go about it?
Yours Confused!

xylophone

Do you mean get quotes for annuities?

dunstonh

skipper65 wrote: »

Hi
Someone has told me today, that you can Tender your pensions to get a better rate? Has anyone ever done this & how do you go about it?
Yours Confused!

Assuming you mean pension income rather than growth (pensions during the accumulation stage dont have rates)

you cant. You were misinformed.

However, there are plans for people with annuities to be able to sell them on a traded market. However, it is not expected to be a good thing for the majority of people due to the amount you getting being hit for tax and the buyer will want to profit from it (so you will get a lot less than you would be expected to get from keeping it)

AnotherJoe

skipper65 wrote: »

Hi
Someone has told me today, that you can Tender your pensions to get a better rate? Has anyone ever done this & how do you go about it?
Yours Confused!

Can you rephrase your question? It's not clear what you mean by "tender" or indeed "pension", since there are many types of pension.

atush

I too dont know what you may mean by tender. This is not a commonly used term. Here, anyway

System

Pension management tendering is commonplace - any organisation, company, local authority etc can seek tenders from pension providers to run their scheme.

Within limits, anyone contributing to or receiving a pension is free to seek quotes from other providers to find one with lower management costs. But that's not really tendering - tendering is when they come to you on invitation, rather than you having to go out and find them.

AnotherJoe

Clifford_Pope wrote: »

Pension management tendering is commonplace - any organisation, company, local authority etc can seek tenders from pension providers to run their scheme.

I doubt OP is working for a company and in charge of organising their pension scheme.

I really hope not anyway :eek:

Freecall

skipper65 wrote: »

you can Tender your pensions to get a better rate

= Open Market Option

Maybe?

dunstonh

For reference, I have read the word "tender" to mean sell and replace with cash. and better rate to mean rate of income as pensions during the accumulation stage (growth upto retirement) dont have rates.

However, everybody is right. The wording is unusual and it is difficult to know exactly what is being referred to. So, clarification is required.

derickadams38

Hello, Some time ago I used an adviser to set up my annuity. He told me that advisers can get a better rate or yearly income than if I were to shop around myself. Is this true ?

dunstonh

derickadams38 wrote: »

Hello, Some time ago I used an adviser to set up my annuity. He told me that advisers can get a better rate or yearly income than if I were to shop around myself. Is this true ?

Yes, it is correct as long as it is an IFA or a whole of market adviser and the amount of the pension fund is around £25k or more.

There are several reasons for this
1 - DIY still allows commission. Advisers are fee based. After about £25k, the fee option works out cheaper than the commission option.
2 - A number of providers wont deal direct with public.
3 - Haggle. Yes, in this day age, some annuity providers can be haggled on the annuity rate.
4 - If there are health issues, the "generally", advisers have been better at relaying the required info to providers than DIY filled out questionnaires
5 - Economies of scale. IFAs dominate the distribution. Some providers have rates which reflect the distribution channel.