Time to sort out my pension, Anyone used AnnuityReady ?

Micron

Impending retirement so it's time to sort out my pensions, not a massive total amount in the fund, some £80,000 spread out over five different companies.

At the moment my plan is to transfer funds as required and split them about 50/50 between an annuity and flexi drawdown.

On looking for some information on annuity providers I turned up AnnuityReady, Retirement Line, Hargreaves Lansdown and many more, I see that AnnuityReady boasts 'whole of market quotes' so is there any real advantage by asking for a quote any other site?

One comment I did notice on the  AnnuityReady site was 'Just enter your information once and we’ll search the open market to see if we can find you a higher annuity rate than your current pension provider', which is not quite the same as finding the highest annuity rate currently available, am I being too pedantic ?

https://www.actuarialpost.co.uk/article/whole-of-market-annuity-comparison-service-launched-17555.htm

dunstonh

On looking for some information on annuity providers I turned up AnnuityReady, Retirement Line, Hargreaves Lansdown and many more, I see that AnnuityReady boasts 'whole of market quotes' so is there any real advantage by asking for a quote any other site?

Use a local IFA.     Once you get above around £30,000, the fee by an IFA is often less than the commission charged by the direct companies.   Plus, if you have health/lifestyle issues, then getting an IFA involved has been reported to result in better outcomes than form filling yourself (people tend to short cut when they do it themselves apparently).

Thrugelmir

dunstonh said:

On looking for some information on annuity providers I turned up AnnuityReady, Retirement Line, Hargreaves Lansdown and many more, I see that AnnuityReady boasts 'whole of market quotes' so is there any real advantage by asking for a quote any other site?

Use a local IFA.     Once you get above around £30,000, the fee by an IFA is often less than the commission charged by the direct companies.   Plus, if you have health/lifestyle issues, then getting an IFA involved has been reported to result in better outcomes than form filling yourself (people tend to short cut when they do it themselves apparently).

Out of curiosity @dunstonh what level of commission would one expect to pay. Been monitoring annuity rates recently and they edging upwards. ( Ball park based on my personal circumstances around 4.9% fixed and 2.8% linked to RPI). Considering annuitising part of my SIPP in the future. Lack of quality fixed income investments is making me think that banking the considerable unexpected windfall of equity gains needs some careful thought. Easy to be become too greedy and hold out for more. A sharp bout of inflation may provide a useful boost as to Gilt yields 

dunstonh

Thrugelmir said:

dunstonh said:

On looking for some information on annuity providers I turned up AnnuityReady, Retirement Line, Hargreaves Lansdown and many more, I see that AnnuityReady boasts 'whole of market quotes' so is there any real advantage by asking for a quote any other site?

Use a local IFA.     Once you get above around £30,000, the fee by an IFA is often less than the commission charged by the direct companies.   Plus, if you have health/lifestyle issues, then getting an IFA involved has been reported to result in better outcomes than form filling yourself (people tend to short cut when they do it themselves apparently).

Out of curiosity @dunstonh what level of commission would one expect to pay. Been monitoring annuity rates recently and they edging upwards. ( Ball park based on my personal circumstances around 4.9% fixed and 2.8% linked to RPI). Considering annuitising part of my SIPP in the future. Lack of quality fixed income investments is making me think that banking the considerable unexpected windfall of equity gains needs some careful thought. Easy to be become too greedy and hold out for more. A sharp bout of inflation may provide a useful boost as to Gilt yields 

On two occasions have I had a client that was comparing us with two of the mentioned annuity companies in post #1.  In one case, it was 2% and the other was 3%.    On one occasion, our fee was slightly higher than the commission from the online site but our annuity rate obtained was higher.  I put that down to haggling and the health information we obtained (more probing of the details than had been supplied on the initial form rather than accepting what was provided).    On the other occasion, the fee hit our fee cap whereas the online annuity provider had no cap on their commission.   So, the margin was much greater.

The thing to be wary of is where the provider says "our rate is the highest obtainable".    I have had a number of cases where they have said that and we have got better.  The provider saying it is basing it on the terms that they have available.  Not the terms that are available to other firms.

Micron

I too would be curious in the level of commission one would expect to pay an IFA to arrange a £30,000 - £40,000 annuity.

Thankfully I at the moment I have no health/lifestyle issues whatsoever so no enhanced pay out for me.

From the Retirement Line Client Agreement  'there is normally no fee to pay for our service as we will be paid a percentage commission payment from the provider ......... Commission on annuities typically varies between 1.5 and 3.5%, depending on the annuity provider'

Wouldn't that make their services to me effectively free?

https://www.retirementline.co.uk/documents/keyfacts/Client_Agreement.pdf?source=RLWeb

dunstonh

I too would be curious in the level of commission one would expect to pay an IFA to arrange a £30,000 - £40,000 annuity.

IFAs are not allowed to receive commission.  They have to be fee based.   The fee will vary with firms with some being expensive and some being cheap.  The fee can be paid out of the pension fund.

From the Retirement Line Client Agreement  'there is normally no fee to pay for our service as we will be paid a percentage commission payment from the provider ......... Commission on annuities typically varies between 1.5 and 3.5%, depending on the annuity provider'

You would expect an IFA to be in the 1.5-2.5% range for fee but it will be the same irrespective of the provider as the provider is irrelevant.   However, if the pot is just £30-40k then I think it is unlikely many IFAs will actually offer terms.   If they were quiet at the time or a new adviser they might but an experienced IFA is likely to consider it too low value for them.

Micron

Thank you dunstonh for the information, the answer is much as I expected it to be, as my pension pot is relatively small the fees taken by an IFA would most probably exceed any increase I might gain from their services so in this case it looks like the way  to go is with one of the online comparison sites.

Can anyone offer any good or bad experiences with any particular annuity comparison site?

Fluka

About nine months ago, I tried all the annuity comparison sites over a couple of weekends. I found that the Money Advice Service was by far the easiest to use.  I was looking to buy an annuity with £45000.

Micron

That’s a very interesting comparison tool Fluka, there are certainly a lot of different combinations you can input just to see how it affects the end result, I’m guessing it only uses a limited amount of annuity providers though as the answers always seemed to result in the same five or six companies being shown, or maybe they change depending on who are the best paying at the time you use the tool.

As a matter of interest in the end did you go with any of the pension companies they suggested or did you go elsewhere?

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

Fluka

Hello Micron, I requested written quotes from the top three, and went with Scottish Widows. Their quote was very close to what the comparison site showed, whereas the other two were significantly lower. But that was nine months ago

jamesd

Micron said:

Impending retirement ...split them about 50/50 between an annuity and flexi drawdown.

If you're anywhere close to state pension age remember that deferring claiming that pays something around twice as much for your money as annuity buying, assuming fairly good health.