Is 8.2% guaranteed annuity a good deal?

cash1948

Thanks for all the comments/advice. Not quite decided but leaning toward taking the 25% tax free and the annuity at a guaranteed rate of 8.2%. We already have reasonable investments in SIPPs/Investment ISAs so a no risk, decent return seems to make good sense

kidmugsy

cash1948 wrote: »

Thanks for all the comments/advice. Not quite decided but leaning toward taking the 25% tax free and the annuity at a guaranteed rate of 8.2%. We already have reasonable investments in SIPPs/Investment ISAs so a no risk, decent return seems to make good sense

Pause before taking the 25% tax free. If you happen to need some capital now then taking the lump sum might be entirely logical. But if you have nothing pressing to spend it on you have to ask yourself what you could invest it in that would return you anywhere near 8.2% with comparably tiny risks. Even allowing for income tax on the extra bit of annuity it could make sense to eschew the 25% tax-free.

P.S. Will your wife be paying income tax on the annuity? In other words will her taxable income exceed the Personal Allowance against income tax?