Making sense of Annuity offers

imsi

I have a retirement fund with Aviva, having paid in a small sum each month for many years.
I got a quote for in house annuities last year, and again last month.
The difference between the 2 quotes surprised me. Not so much the ups or downs but the relationships between the the options.
2019 with 33% taken cash free: £6525 (fixed), £6515 (increasing with RPI). Full fund: £8701 (fixed), £8688 (increasing with RPI).
2020 with 33% taken cash free: £8114(fixed), £4897 (increasing with RPI). Full fund: £10818 (fixed), £6531 (increasing with RPI).
I'm wondering why there was so little difference last year to keep up with inflation and why this years figures have such a comparatively wide range.
It's partly curiosity but I'm hoping knowing some of the reasons behind the change in figures will help me decide whether to accept one of these offers or put it off for another year.
Any comments gratefully received.
Rob

garmeg

RPI annuities would be half the fixed annuity due to the high price of index linked gilts.

Those figures look odd, especially the first set.

jamesd

It's hard to believe the 2019 RPI figure. That is so high that only some sort of guarantee or error seem likely.

garmeg

jamesd said:

It's hard to believe the 2019 RPI figure. That is so high that only some sort of guarantee or error seem likely.

The 2020 RPI looks a bit high too. Might be a plausible ratio if @imsi is in their 70's.

wjr4

What is the fund value? 

imsi

Sorry for delay.
I am 67 years old. (66 at time of quote on 10 July 20)
The value of the plan this year is £59,356.63( Final Bonus £35,890.51) giving a retirement fund £95,247.14
Last year was £54897.21 (£+23297.10) , retirement fund of £78194.31

elouise01582

With the 33% tax-free cash being stated this sounds like an occupational pension of some kind - maybe an EPP or even a retirement annuity contract taken out pre 1988.  Could this explain the odd income figures I wonder?

dunstonh

Indeed, 33% tax free cash would indicate an EPP, Section 32 buy out bond or a hybrid scheme with transitional relief.     A section 226 RAC is possible but rare.   In 2006, they had the PCLS aligned to 25% of value to match personal pensions unless the figure was over 25%.    The vast majority would have been under 25% but there is a possibility that a small number could be over and obtained transitional relief.
Norwich Union, in particular, were a common home for hybrid plans and S32 buy out bonds.
GMP may be included in the plan which would impact on the annuity rates.