index linked fixed term annuities

cobson

Do these exist ?  I can find online quotes for annuities, but the fixed term ones are always level.

Marcon

cobson said:

Do these exist ?  I can find online quotes for annuities, but the fixed term ones are always level.

Indeed they do. Good explanation of the pros and cons of fixed (short) term annuities here: https://www.unbiased.co.uk/life/pensions-retirement/should-i-get-a-fixed-term-annuity

cobson

Is there anywhere online that gives quotes for them ?

Albermarle

This list does not cover every angle but gives a good idea.
Annuity Rates: View Best Annuity Rates from the UK Market (hl.co.uk)

cobson

Albermarle said:

This list does not cover every angle but gives a good idea.
Annuity Rates: View Best Annuity Rates from the UK Market (hl.co.uk)

Thanks, but they only cover lifetime annuities

OldScientist

https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/compare-annuities

might be helpful (there are both lifetime and fixed term options - but the latter do not include any inflation options).

Moneyhelper suggest contacting a broker for the various options for fixed term annuities they do not cover (joint, guarantee period, inflation protection).

MK62

Interesting........could be very useful for a DC pension holder looking at bridging the gap from early retirement to state pension. Looks to be roughly equivalent to a 5%pa return for the numbers I punched in. True, there's no inflation protection, but then there's none with cash either....

Bimbly

MK62 said:

Interesting........could be very useful for a DC pension holder looking at bridging the gap from early retirement to state pension. Looks to be roughly equivalent to a 5%pa return for the numbers I punched in. True, there's no inflation protection, but then there's none with cash either....

Exactly what I was thinking after playing around with the moneyhelper link.

OldScientist

Bimbly said:

MK62 said:

Interesting........could be very useful for a DC pension holder looking at bridging the gap from early retirement to state pension. Looks to be roughly equivalent to a 5%pa return for the numbers I punched in. True, there's no inflation protection, but then there's none with cash either....

Exactly what I was thinking after playing around with the moneyhelper link.

The underlying interest rates will very roughly follow the bond rates at the relevant duration (i.e., a 5 year annuity will be at the 5 year bond rate, 10 year annuity will be at the 10 year bond rate, etc.). The payment rate will be higher.

With a level, nominal, annuity, one way of offsetting the the loss of purchasing power is to use investment portfolio withdrawals (these would at least start small, reducing, but not eliminating sequence of return risks).

I have no experience of these (perhaps one of our fellow board members will chip in), but information at https://www.lv.com/pensions-retirement/fixed-term-annuities appears to indicate that index-linked versions of fixed term annuities are available (at least from LV=) - of course, for the same premium, the initial income will be lower (because the real yields on inflation-linked bonds, at around 0%, are currently lower than for nominal bonds).

cobson

MK62 said:

Interesting........could be very useful for a DC pension holder looking at bridging the gap from early retirement to state pension.

Yes that was my thought. I'd already looked at the sites mentioned on this thread without success.

Do any of the IFAs who post on this site have this kind of information ?  I've heard them say that they can get better annuity rates than the general public but does it work out cheaper once their fees are added ?