GAR Phoenix

gocat

I have a Phoenix pension.
Recently received a annuity quote
£70000 Protected rate
£9,000 Non protected rate

Quotes that are given
Protected rate bit says "This option does not use the guaranteed minimum annuity rates"
Non protected rate bit says "This option uses the guaranteed minimum annuity rates"

Does this mean I would only get the GAR on the £9000 bit of the quote?
The £70000 bit would just be at normal annuity rate?

As far as I know the GAR is 7.5%
Don't know what normal rate is yet. (I'm guessing about 4%)

tia for replies

dunstonh

Does this mean I would only get the GAR on the £9000 bit of the quote?
The £70000 bit would just be at normal annuity rate?

From what you have written, it would indicate that.

gocat

dunstonh wrote: »

From what you have written, it would indicate that.

Thanks for reply.
Have you ever come across this before. I took out my policy 1990.

Malthusian

When you said "protected rate" did you mean to write "protected rights"?

The way you have written it doesn't make a lot of sense. However, if it's protected rights it makes more sense. (Protected rights is money from National Insurance rebates which you elected to receive in lieu of additional State Pension. These used to be "protected" in the sense that you were restricted on what you could do with them, but these restrictions were removed some years ago, and they are now usually referred to as "former protected rights" or similar.)

It makes more sense because I have seen quite a few plans where National Insurance rebates were paid into a separate plan to personal contributions, with different terms - so that might have meant no GARs. Or you may have taken the plans out at different times.

dunstonh

gocat wrote: »

Thanks for reply.
Have you ever come across this before. I took out my policy 1990.

Seen it frequently.

Protected rights had to be paid in a different way to non-protected rights. So, it couldnt get the same guaranteed rate that non-protected rights got. Some providers would offer a different GAR for protected rights but some would only offer the GAR on the non-protected rights.

gocat

Malthusian wrote: »

When you said "protected rate" did you mean to write "protected rights"?

The way you have written it doesn't make a lot of sense. However, if it's protected rights it makes more sense. (Protected rights is money from National Insurance rebates which you elected to receive in lieu of additional State Pension. These used to be "protected" in the sense that you were restricted on what you could do with them, but these restrictions were removed some years ago, and they are now usually referred to as "former protected rights" or similar.)

It makes more sense because I have seen quite a few plans where National Insurance rebates were paid into a separate plan to personal contributions, with different terms - so that might have meant no GARs. Or you may have taken the plans out at different times.

Ah yes. meant Rights. Sorry about that.
No I just took out the plan once and that was that.

Ah well. Not as much money as I thought I would get then

kidmugsy

Is there any point in requesting that you transfer the non-protected rights bit to, say, a personal pension of some sort, and accept the annuity on the rest? Would it cost anything to ask?

Malthusian

kidmugsy wrote: »

Is there any point in requesting that you transfer the non-protected rights bit to, say, a personal pension of some sort, and accept the annuity on the rest? Would it cost anything to ask?

That would be a very bad idea as it is the non-protected rights bit that has the GAR. (I know what you meant.)

The OP should almost certainly not accept an annuity with Phoenix with the £70,000 as the non-GAR rate (apologies for RAS syndrome) will be rubbish. At a minimum he/she should shop around and should consider getting independent financial advice - for a fund of £70,000 it is likely to be worth it.

*edit* and to answer the question, yes it is certainly worth asking as Phoenix should almost certainly be able to do this. The vast majority of pension providers should be able to facilitate a partial transfer request - in a case like this where the part that you want to transfer is already separated out, it's trivial. If they tried to hold the £70,000 hostage as a condition of paying the GAR on the £9,000 I would write a strongly worded letter of complaint involving the words "Treating Customers Fairly" a lot and go all the way to the Ombudsman if necessary.

I have seen plans where part of it has a GAR and part of it doesn't, and you can't separate the two, and that's part of the terms of the contract - but those weren't non-protected / protected rights arrangements. In this case taking the GAR on the non-protected rights only and doing something else with the rest should be possible.

gocat

Hmmm thanks for this. Did some comparison quotes for the protected rights part of my pension pot, on the money advice services site and the quotes are coming up for much less than what Phoenix have quoted me.
Even tried putting my health problems in, weight etc and still quotes are less than the phoenix one.
Will keep comparing. Might find something.

Malthusian

I find that quite odd as Phoenix are not known for offering attractive annuity rates if they aren't forced to by GARs.

Are you certain you are comparing on a like-for-like basis? If the Phoenix quote is for a single life and level annuity, are you looking at the same kind of annuity on your comparison or are you looking at joint life or RPI-linked annuities? Have you taken off the 25% tax free cash in both cases?

An IFA would be able to help with this and give you certainty that you are getting the best deal. For the amount that you are going to pay out of your pension fund to the comparison site in commission (comparison websites are still allowed to take commission unlike IFAs) you might as well pay an IFA and get a better service.

xylophone

If you are sure that you want an annuity, then an IFA might well provide you with the best option for your circumstances.

http://www.thepfs.org/yourmoney/find-an-adviser/