Fixed term annuity

Malthusian

jayjays wrote: »

1. Why would my Sipp only allow those odd %'s of 77 and 22 , I'me sure I could have known this but didnt

Someone has explained it extremely badly to you because that's nonsense.

The most likely explanation I can think of is that Hargreaves Lansdown requires a minimum of say £5,000 to be left in the SIPP if they'll do a partial transfer.

A potential explanation in this scenario is that there are outstanding fees on the account, such that when these are paid, there's less than £115,000 left over. But that doesn't sound likely to me as I can't see how you'd be due to pay £3,374 in fees.

Did you have £115,000 in cash in the SIPP or was it still invested? If it was all invested, HL could reasonably refuse to allow a partial transfer until you'd moved £115,000 into cash, because at that value it's very easy for the investments to fall below £115,000 while HL are processing the transfer.

2.Why was my new quote £1400 more than my expectation, i guess it had something to do with the stock market decline but dont know why it increased, I was preparing for a decrease !

You mean the guaranteed maturity value was £1,400 more than you expected? (As opposed to the purchase price being £1,400 more.)

Aren't you transferring more in from HL than you were expecting (due to issue 1) or have I misunderstood?

Could be month-to-month changes in annuity rates, could be that you were slightly older than when you obtained the original quote. (I wouldn't expect a change in age to have that much of an effect, given that unlike with a lifetime annuity, you are unlikely to die during the term.)

PS Has your father cashed in his Tesco bond and reinvested in something more in line with his risk profile yet, now that he knows he could lose all his money?

jayjays

Hi Malt, thanks for your reply

Here are the exact words of the message I received ....we are only allowed to carry out a partial transfer, where the part transferred represents the percentage split of the arrangements within your Drawdown account as they must be transferred in full. Consequently you now have the following three options.....
The 3 options were 77.120505% or 22.0879495% or 100%, all money was cash and only a £25 tranfer fee to come out, as I say this wasn't really a majot problem but it could have been an annoyance, I'm sure the small print would have stated the terms, its just the terms seem odd !

The £1400 was more than I had calculated, based on the the original (measly growth) assuming the additional money attracted the same growth.... so original £115000 delivered £120904, revised £118374 delivered £125868. I was only 3 weeks older so i guess that wasn't the reason )

When i told my father in law what the experts has said he wasn't having any of it, insisting it was "guaranteed", he went on to comment that even if i was correct it wouldn't be the end of the world, he hadn't got to this stage in his life without being able to take a risk given the attractive return , no more was said .......... a few weeks later when we visited he dropped into an unrelated conversation " i dumped that Tesco bond and put the money into a guaranteed investment " , no more was said # thanks guys