10 year fixed term annuity

mexicano

Hi guys/gals,

I would like to draw my pension as I will be 65 this year. I have deferred my retirement twice already and I thought that if I keep on delaying and not take the money now all that will happen is my beneficiaries will get it!
I have decided that my best option is to take out a 10 Year Fixed Term Annuity with 100% value protection and no maturity value, whereby the pension will be totally used up, I hope I got that right?
My question is: Is there a comparison website where I can find the best provider for this type of annuity? I really don't want to pay 1% in fees to an IFA if I can do the comparison myself.
Or will I have to phone up several insurance companies and obtain quotes from them for comparison?

Any help would be appreciated.
If I really have to consult an IFA then I will, but I would rather not
Thanks

dunstonh

My question is: Is there a comparison website where I can find the best provider for this type of annuity? I really don't want to pay 1% in fees to an IFA if I can do the comparison myself.

That isnt very logical. The commission on non-advised internet purchases tends to be around 2-5%. So, paying a fee of 1% to an IFA is cheaper.

Or will I have to phone up several insurance companies and obtain quotes from them for comparison?

Yes. And some wont deal with you directly. So, you would need to use an intermediary with a website. However, they dont tend to haggle rates like an IFA would. So, you usually end up with a lower annuity rate and paying more in commission than the fee.

mexicano

Hi,
What isn't logical? I've never heard of "non-advised internet purchases". I just thought that I could do a search on a comparison site, like utility or savings accounts.
Are you saying there are companies that just search for providers and give you their contact details and they will charge 2-5% for this before they give you the info?

westv

If fixed term annuities float your boat then this might be of some use.

https://www.moneyadviceservice.org.uk/en/tools/annuities

mexicano

Thanks westv. It only gives me three providers and still recommends that I should contact an ifa!
I might call pension wise tomorrow and have a chat with them.
Thanks again

kidmugsy

mexicano wrote: »

I have decided that my best option is to take out a 10 Year Fixed Term Annuity with 100% value protection and no maturity value, whereby the pension will be totally used up

That's an interesting choice. Would you like to tell us your logic?

westv

mexicano wrote: »

Thanks westv. It only gives me three providers

There because there aren't many providers.

dunstonh

What isn't logical? I've never heard of "non-advised internet purchases". I just thought that I could do a search on a comparison site, like utility or savings accounts.

Annuities are a product that fall under regulation. You either buy them on a non-advised or advised basis. If bought under advice, no commission is allowed. If bought non-advised, then commission is allowed (and the annuity rate lower).

There are several websites that facilitate the purchase of annuities on a non-advised basis which avoids an IFA. Not quite comparison sites but about the best you can get for annuities.

The questionable logic is that you dont want to pay an IFA 1% but you are happy to pay a comparison site 3-5% for worse terms.

It only gives me three providers and still recommends that I should contact an ifa!

MAS would say that because they know that using an IFA is likely to give you the best annuity rate.

When you fund is over around £25k, using an IFA is likely to be the best option for you. Even people that do all their investments and everything else on a DIY basis have said that using an IFA in this scenario is the best option. Its a quirk that doesnt happen on many products (on a like for like basis) but it happens with annuities.

mexicano

Hi kidmugsy.
I don’t want to drawdown with all the fuss of reviews every year or release all the pension into cash. I’m also not sure how long I’ve got before the long sleep, even though the insurance companies estimate 89 years!!
I have a LOT of cash in isas (no wife or kids) so I figured that I should take my pension spread over 10 years which would take me to 75. By then I will probably be mentally gone anyway ����
I want to enjoy what I’ve got left and I don’t want to leave any of my pension to the insurance company.
I hope that makes some sense?

coyrls

mexicano wrote: »

Hi kidmugsy.
I don’t want to drawdown with all the fuss of reviews every year or release all the pension into cash. I’m also not sure how long I’ve got before the long sleep, even though the insurance companies estimate 89 years!!
I have a LOT of cash in isas (no wife or kids) so I figured that I should take my pension spread over 10 years which would take me to 75. By then I will probably be mentally gone anyway ����
I want to enjoy what I’ve got left and I don’t want to leave any of my pension to the insurance company.
I hope that makes some sense?

Not really.

1) There are no reviews every year for flexi access drawdown
2) If you don't convert your pension into an annuity, your pension will not be left to an insurance company when you die
3) Why not spend your cash now and convert your pension to an annuity when you are older and you will get better rates?
4) Why do you think you will by mentally gone at 75?

dunstonh

I don’t want to drawdown with all the fuss of reviews every year or release all the pension into cash.

Reviews are not long winded or an issue. As you dont want to use an IFA, there would be no reviews. You control your investments. However, if you used an IFA, its not intrusive or an issue.

I’m also not sure how long I’ve got before the long sleep, even though the insurance companies estimate 89 years!!

a sustainable drawdown rate may not be too different to an annuity at this time. Plus you can always move to an annuity later when health issues arise. If you are happy to lose some of your fund, then the draw rate on drawdown could be better than the annuity.

I want to enjoy what I’ve got left and I don’t want to leave any of my pension to the insurance company.

So, why are you considering an annuity?