Thirty Year Guarantee Annuity

choi

I am considering the following as an option

Single Annuity
Guaranteed 30 years
RPI Escalation

I am assuming this will continue to pay out to my wife on my death for the full term of 30 years
And to my family after her death if before 30 year period ends

Is this correct

HappyHarry

Yes.

It might be better value to have 100% spouses pension and no guarantee, though it does depend on your priorities.

choi

HappyHarry wrote: »

Yes.

It might be better value to have 100% spouses pension and no guarantee, though it does depend on your priorities.

Hi
Please explain why it might be better value to go with
100% Spouse
RPI escalation

Thanks

HappyHarry

Depending on your ages, you may get a better annuity rate with. 100% annuity, which would pay an income to you and your wife throughout your lifetimes.

Of course, this means that if you and your wife were both to die within 30 years, no further funds would be paid out.

Do either you or your wife have any health issues which could justify an enhanced annuity rate?

choi

HappyHarry wrote: »

Depending on your ages, you may get a better annuity rate with. 100% annuity, which would pay an income to you and your wife throughout your lifetimes.

Of course, this means that if you and your wife were both to die within 30 years, no further funds would be paid out.

Do either you or your wife have any health issues which could justify an enhanced annuity rate?

I was interested in 30 year guaranteed option as we would get back more than the cost of the annuity over the full period

I am 67 and currently in good health
My wife 61 with an underactive thyroid

She will get
Full State Pension
Plus workPension of £7k pa

I am looking for the best option to get as near £6k plus pa from a £250k pot
Using the whole pot

Linton

30 years guarantee means that the annuity pays out for 30 years even if all the annuitants have died. A joint annuity means that it lasts until the last one dies, no matter how long or short a time this is. If you are going for the second option why would you want to pay in addition for the first? None of these options comes for free.

choi

Linton wrote: »

30 years guarantee means that the annuity pays out for 30 years even if all the annuitants have died. A joint annuity means that it lasts until the last one dies, no matter how long or short a time this is. If you are going for the second option why would you want to pay in addition for the first? None of these options comes for free.

If I go with Joint Annuity I would not use a guarantee
Like wise if I go with 30 year guarantee I would not use a joint annuity

A_Nice_Englishman

Why aren't you considering a joint annuity with the guarantee? The guarantee probably wouldn't cost that much (less than a similar guarantee on a single life annuity).

I'd get quotes swith and without the guarantee and then decide whether the lower pension is worth exchanging for some further payments to your kids should you not survive thirty years.

Annuities are basically bets with the provider that you will live longer than they think you will. A guarantee is hedging the bet to some extent!

ProDave

choi wrote: »

I am looking for the best option to get as near £6k plus pa from a £250k pot
Using the whole pot

That statement alone reinforces what I think, than an annuity is a very bad idea.

Put your £250K into a drawdown SIPP and draw your £6K per year and the pot will last 41 years even assuming no interest or growth. I think that might just be long enough for you?

I would be wanting a LOT more than £6K per year before I would even give an annuity a second thought.

A_Nice_Englishman

ProDave wrote: »

That statement alone reinforces what I think, than an annuity is a very bad idea.

Put your £250K into a drawdown SIPP and draw your £6K per year and the pot will last 41 years even assuming no interest or growth. I think that might just be long enough for you?

I would be wanting a LOT more than £6K per year before I would even give an annuity a second thought.

Not if he wants £6k initially increasing at RPI, unless you know an investment that will match RPI over 41 years.

davidwatts

Just to throw another option into the mix, I'd certainly have a look at quotes for a level annuity that doesn't increase from year to year. Any time I compare annuity quotes that always seems the most attractive option, as the reduction applied for index linking always seems slightly excessive.

Might be different depending on ones circumstances but no harm in getting a quote for comparison.