Retirement Questions

kidmugsy

A relative has taken a With Profits Annuity and is happy with it so far. It came with a "collar" i.e. even if the investments do badly there's a minimum annual payment that is guaranteed.

AnotherJoe

Silvertabby wrote: »

On the whole, these were manual workers who had never seen such sums of money and who were so entranced by the sums quoted that they couldn't/wouldn't see what they were giving up - ie, death and ill-health benefits, a guaranteed index linked pension (with spouse's benefits on death) for life, etc etc. Many decent IFA's wouldn't sign off the transfers, presumably because they could see the trouble ahead, but there were many unscrupulous fly-by-night pension advisory services who would and did.

Of course, when the money runs out, these boys won't be around to pay compensation for bad advice.

Unfortunately, the taxpayer will be.

AnotherJoe

choi wrote: »

Are there any other ways to improve the annuity
over the length of my life

Take up smoking?
Move to Glasgow.

xylophone

Im retiring very soon now and need some advice

You are already drawing your state pension? Is this old or new rules?

Had you considered making a pension contribution from "relevant earnings" in this tax year?

What is your wife's state pension situation? Does she have any other pension provision? Is she still employed?

Malthusian

AnotherJoe wrote: »

Unfortunately, the taxpayer will be.

No they won't. The cost of bad advice by regulated advisers is paid for by other regulated advisers, and others who fall under the Financial Services Compensation Scheme's "intermediary" fee bracket - and in turn is of course paid by their clients.

bostonerimus

kidmugsy wrote: »

A relative has taken a With Profits Annuity and is happy with it so far. It came with a "collar" i.e. even if the investments do badly there's a minimum annual payment that is guaranteed.

The guarantee of an annuity is attractive to many people, but these type of products come with fees and expenses. So it's important to understand those, the potential payout and the guaranteed amounts.

dunstonh

bostonerimus wrote: »

The guarantee of an annuity is attractive to many people, but these type of products come with fees and expenses. So it's important to understand those, the potential payout and the guaranteed amounts.

Non-advised annuities don't have explicit charges. it is all implicit like savings accounts.

Advised annuities are partially implicit apart from the explicit charge of the cost of advice.

bostonerimus

dunstonh wrote: »

Non-advised annuities don't have explicit charges. it is all implicit like savings accounts.

Advised annuities are partially implicit apart from the explicit charge of the cost of advice.

Yes, the fees are usually not visible....eg I have a deferred annuity that pays a minimum of 3% and is currently crediting at 4.85%. The fees are baked in and are not shared with the customer, but it's good to be aware that they exist.

choi

Hi
I have decided to go for a annuity using my full pot of £255,000

Monthly payment in arrears
Increasing payments in line with Uk RPI
Guaranteed for 20 years
50 % Dependents Income Guarantee

What amount of annual pension would this give
Is there any way to improve on this

I do not like taking big risks
My wife and I are in good health

Thanks

Linton

You have not told us the most important piece iof information in determining annuity rates - how old are you? How old is your dependent?

If you retire and both are 65 in average health you would expect around 3% for an RPI linked annuity, so say £7.5-£8.5K. However for an exact figure with all your requirements you would need a personal quote.

Using your full pot to buy an annuity would probably be a bad idea - better to take the 25% tax free lump sum.

Are you buying an annuity through an IFA? It would probably be worth while to do so. The worst option is to simply go for the one offered by the pension provider.