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Prudential With Profits Annuity
Thrifty999
Posts: 7 Forumite
I have been drawing on this annuity for 15 years or so, initially at an anticipated bonus Rate of 5% (the maximum). Income dropped a little over the years as was to be expected at this ABR and pretty much in line with the quoted forecast at the outset, having largely smoothed the effect of 2008 etc., and was at 86% of the original in the 2016 review in respect of the year ending 2015. The original forecast was 88% so only 2% different despite 2008.
I elected to change the ABR to a lower figure to "save" some more money for the future, in doing so the minimum income guarantee dropped by 40%.
Now I have a quote showing the effect of changing ABR again - if I put it back to 5% the minimum income guarantee does not go back to what it was - it remains at pretty much the same level as at 1% ABR.
What actually happens inside the machinery of a With Profits Annuity when ABR is changed?
I elected to change the ABR to a lower figure to "save" some more money for the future, in doing so the minimum income guarantee dropped by 40%.
Now I have a quote showing the effect of changing ABR again - if I put it back to 5% the minimum income guarantee does not go back to what it was - it remains at pretty much the same level as at 1% ABR.
What actually happens inside the machinery of a With Profits Annuity when ABR is changed?
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