Canada Life say I can get a bigger pension but won't tell me where from!

Jerry_Mander

I got a quote for an annuity from Canada Life and in the quote they compare their amount to the amount I could get from other providers. The difference is quite substantial. Is there a way, other than going through an IFA, to find out which provider this better quote is coming from? I've been through money advice service and that showed the maximum was from Canada Life.

dunstonh

Is there a way, other than going through an IFA, to find out which provider this better quote is coming from from?

No.    The regulations require them to do a check but not state who it is.  Probably because it is so unreliable.     Plenty of times I have seen providers claim they have the highest when they dont or the highest claim there is an alternative higher one.   

I wouldn't be too worried about using an IFA unless your fund is under £30k.   Direct to provider/non-advised annuities have a commission factored into them that can lower the annuity rate below what an IFA can achieve on fee basis.  

I've been through money advice service and that showed the maximum was from Canada Life.

That will be by using default pricing.  Most annuities bought do not use default pricing.  For example, IFAs cannot rely on those as they are not accurate enough to make a purchase decision.

ErinGoBrath

dunstonh said:

Is there a way, other than going through an IFA, to find out which provider this better quote is coming from from?

No.    The regulations require them to do a check but not state who it is.  Probably because it is so unreliable.     Plenty of times I have seen providers claim they have the highest when they dont or the highest claim there is an alternative higher one.   

I wouldn't be too worried about using an IFA unless your fund is under £30k.   Direct to provider/non-advised annuities have a commission factored into them that can lower the annuity rate below what an IFA can achieve on fee basis.  

I've been through money advice service and that showed the maximum was from Canada Life.

That will be by using default pricing.  Most annuities bought do not use default pricing.  For example, IFAs cannot rely on those as they are not accurate enough to make a purchase decision.

AJ Bell Youinvest charge £150 for an annuity purchase. Hargreaves Lansdown dont seem to quote a charge.

Presumably an IFA would cost a lot more than £150. Presumably they wont be able to access annuity rates that AJ Bell cannot get / match?

Jerry_Mander

dunstonh said:

I wouldn't be too worried about using an IFA unless your fund is under £30k.

I am worried though. My fund is substantially more than £30k but still an IFA will probably cost me £4-5k. That's a lot of money if they only come up with what money advice service's best (Canada Life) is already giving me.
Do you think I could phone an IFA and say, look can you definitely beat this quote I've had?

squirrelpie

Jerry_Mander said:

I got a quote for an annuity from Canada Life and in the quote they compare their amount to the amount I could get from other providers. The difference is quite substantial. Is there a way, other than going through an IFA, to find out which provider this better quote is coming from? I've been through money advice service and that showed the maximum was from Canada Life.

Send Canada Life a Subject Access Request and ask them for a copy of all data they hold on you? Unless they've destroyed the data, that should reveal the details?

xylophone

Have you had a try here?
https://www.hl.co.uk/retirement/annuities/best-buy-rates

dunstonh

AJ Bell Youinvest charge £150 for an annuity purchase. Hargreaves Lansdown dont seem to quote a charge.

The last HL I saw took a commission that was higher than the IFA fee and resulted in a lower annuity rate.   

Presumably an IFA would cost a lot more than £150. Presumably they wont be able to access annuity rates that AJ Bell cannot get / match?

AJ Bell charge £150 to purchase the annuity if you already hold an AJ Bell pension.    You still have to source the annuity and a non-advised annuity would have a commission on it.   So, that could easily cost a lot more than an IFA.

I am worried though. My fund is substantially more than £30k but still an IFA will probably cost me £4-5k.

1 - The fee may not be that high (I can categorically state that there are firms that do not charge that much

2 - The commission on non-advised annuities can be higher still.

That's a lot of money if they only come up with what money advice service's best (Canada Life) is already giving me.

Not if the commission is higher than the fee.

Do you think I could phone an IFA and say, look can you definitely beat this quote I've had?

Impossible to answer like that as a medical Questionnaire would be needed.    However, £30k+ (ish) is where an IFA can start to beat commission-based annuities.

jamesd

Are you within a few years of your state pension age? It's increased by 5.8% for each year you defer (1% every 9 weeks) and this has uncapped CPI inflation increases, making it a better "buy" than almost all annuities. You just don't claim and draw an amount corresponding to your state pension from the other pension instead.

ratechaser

OP - not to pry, but annuities these days are somewhat niche in their appeal, given 
their poor value relative to years gone by. I understand that some people value the security they bring, but just wanted to check that you were aware of other options, specifically drawdown...?

Jerry_Mander

ratechaser said:

 just wanted to check that you were aware of other options, specifically drawdown...?

Yes I'm aware of other options but I want something that's guaranteed. Drawdown just doesn't fit that category. And my particular circumstances make an annuity the best option.

xylophone

https://adviserbook.co.uk/   You would tick "confirmed independent" and other specialisms required

when the menu comes up.


You can then ring round to see what's on offer.