We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
The MSE Forum Team would like to wish you all a Merry Christmas. However, we know this time of year can be difficult for some. If you're struggling during the festive period, here's a list of organisations that might be able to help
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Has MSE helped you to save or reclaim money this year? Share your 2025 MoneySaving success stories!
Annuities
Comments
-
What's the fixed level option?westv said:
That will depend on age?dunstonh said:westv said:
I'm sure I read that most sales in the past were level annuities. Does make me wonder if a higher income amount but with high inflation is any better or worse than a lower income and very low inflation.dunstonh said:
Yes. They will likely begin to outsell drawdown again.Kim1965 said:Can anyone see anniities making a comeback? I believe they are mot as hopeless now.
With a few more interest rate rises and improving gilt yields, indexed annuities could well be better than a 3.5% draw rate on drawdown.
I just had a quick look to see what I'd get for age 60 (it's next year but I just put in that I'm that age now), RPI, 50% survivor and no guarantee period.
1.90% on HL's selector.0 -
4.5% ......Thrugelmir said:
What's the fixed level option?westv said:
That will depend on age?dunstonh said:westv said:
I'm sure I read that most sales in the past were level annuities. Does make me wonder if a higher income amount but with high inflation is any better or worse than a lower income and very low inflation.dunstonh said:
Yes. They will likely begin to outsell drawdown again.Kim1965 said:Can anyone see anniities making a comeback? I believe they are mot as hopeless now.
With a few more interest rate rises and improving gilt yields, indexed annuities could well be better than a 3.5% draw rate on drawdown.
I just had a quick look to see what I'd get for age 60 (it's next year but I just put in that I'm that age now), RPI, 50% survivor and no guarantee period.
1.90% on HL's selector.0 -
Soon be north of 6% then.westv said:
4.5% ......Thrugelmir said:
What's the fixed level option?westv said:
That will depend on age?dunstonh said:westv said:
I'm sure I read that most sales in the past were level annuities. Does make me wonder if a higher income amount but with high inflation is any better or worse than a lower income and very low inflation.dunstonh said:
Yes. They will likely begin to outsell drawdown again.Kim1965 said:Can anyone see anniities making a comeback? I believe they are mot as hopeless now.
With a few more interest rate rises and improving gilt yields, indexed annuities could well be better than a 3.5% draw rate on drawdown.
I just had a quick look to see what I'd get for age 60 (it's next year but I just put in that I'm that age now), RPI, 50% survivor and no guarantee period.
1.90% on HL's selector.0 -
That is now. However, as rate rises continue, then it will change.westv said:
That will depend on age?dunstonh said:westv said:
I'm sure I read that most sales in the past were level annuities. Does make me wonder if a higher income amount but with high inflation is any better or worse than a lower income and very low inflation.dunstonh said:
Yes. They will likely begin to outsell drawdown again.Kim1965 said:Can anyone see anniities making a comeback? I believe they are mot as hopeless now.
With a few more interest rate rises and improving gilt yields, indexed annuities could well be better than a 3.5% draw rate on drawdown.
I just had a quick look to see what I'd get for age 60 (it's next year but I just put in that I'm that age now), RPI, 50% survivor and no guarantee period.
1.90% on HL's selector.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
Yes I know that.dunstonh said:
That is now. However, as rate rises continue, then it will change.westv said:
That will depend on age?dunstonh said:westv said:
I'm sure I read that most sales in the past were level annuities. Does make me wonder if a higher income amount but with high inflation is any better or worse than a lower income and very low inflation.dunstonh said:
Yes. They will likely begin to outsell drawdown again.Kim1965 said:Can anyone see anniities making a comeback? I believe they are mot as hopeless now.
With a few more interest rate rises and improving gilt yields, indexed annuities could well be better than a 3.5% draw rate on drawdown.
I just had a quick look to see what I'd get for age 60 (it's next year but I just put in that I'm that age now), RPI, 50% survivor and no guarantee period.
1.90% on HL's selector.
I was responding to your mention of the possibility of +3.5% index linked annuity rates in the near(?) future.0 -
With wrong provider and the wrong funds , the costs could be significant .TELLIT01 said:On a small pension pot couldn't the admin costs of drawdowns outweigh the benefits of the flexibility?
However it is possible to have a cost of around 0.5% to 0.6% all in , even for a small pension pot.0 -
So once the annuity has been taken out, the income from that point is not affected by market volitilty etc?
I can see why the simplicity of an annuity would appeal to the financially inept.
So do annuity rates tend to follow inflation? Do we ever get decent annuity rates at times of low inflation?0 -
So once the annuity has been taken out, the income from that point is not affected by market volitilty etc?
I can see why the simplicity of an annuity would appeal to the financially inept.
So do annuity rates tend to follow inflation? Do we ever get decent annuity rates at times of low inflation?0 -
So once the annuity has been taken out, the income from that point is not affected by market volitilty etc?There are some annuity types you can buy that have an investment element but the main ones do not.So do annuity rates tend to follow inflation?You have have level, CPI indexation, RPI indexation (both with or without floors in case of deflation) or fixed indexation,Do we ever get decent annuity rates at times of low inflation?The main drivers with annuity rates are mortality and gilt yields. Low interest rates and low inflation hurt gilt yields which hurt annuities. Higher interest rates and inflation improve gilt yields and improve annuity rates.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
The word guaranteed isn't synonymous with stock market investing.Kim1965 said:
I can see why the simplicity of an annuity would appeal to the financially inept.0
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.9K Banking & Borrowing
- 253.9K Reduce Debt & Boost Income
- 454.7K Spending & Discounts
- 246K Work, Benefits & Business
- 602.1K Mortgages, Homes & Bills
- 177.8K Life & Family
- 259.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards