Excellent Annuity Rates

Spivo46

The DC pensions have taken a hit but slowly recovering. I am thinking of taking a fixed term annuity over 20 years after taking my 25%, nothing comes close in terms of RTI. How long will they stay at the current rates, i don't want to invest for anther 6 months.

dunstonh

Annuity rates have been falling over the last 6 weeks.

[Deleted User]

Spivo46 said:

The DC pensions have taken a hit but slowly recovering. I am thinking of taking a fixed term annuity over 20 years after taking my 25%, nothing comes close in terms of RTI. How long will they stay at the current rates, i don't want to invest for anther 6 months.

There is no way to predict. You can only try to guess. But… If annuity rates are going down, it means inflation is likely subdued and your portfolio might be going up.  Of course there are other factors.

Spivo46

dunstonh said:

Annuity rates have been falling over the last 6 weeks.

Really interesting. The fixed term rates are amazing. Moneyhelper annuity tool, try a £300k purchase over 20 years. A DC pension drawdown doesnt come close

Pat38493

Spivo46 said:

dunstonh said:

Annuity rates have been falling over the last 6 weeks.

Really interesting. The fixed term rates are amazing. Moneyhelper annuity tool, try a £300k purchase over 20 years. A DC pension drawdown doesnt come close

I take it these are not inflation linked - you just get the same amount every year?  Is that really so good then?

[Deleted User]

Pat38493 said:

Spivo46 said:

dunstonh said:

Annuity rates have been falling over the last 6 weeks.

Really interesting. The fixed term rates are amazing. Moneyhelper annuity tool, try a £300k purchase over 20 years. A DC pension drawdown doesnt come close

I take it these are not inflation linked - you just get the same amount every year?  Is that really so good then?

You can pick either but genuine “inflation” linked annuities are usually bad value.  You normally pay too much to cover this risk in full.  An alternative is something that goes up at a fixed rate. 

Qyburn

Spivo46 said:

Really interesting. The fixed term rates are amazing. Moneyhelper annuity tool, try a £300k purchase over 20 years. A DC pension drawdown doesnt come close

What do you do after 20 years?

michaels

If you had purchased a similar product 2 years ago your income would already be down 20% ish from when you started and probably 15% more than you expected and this is for the next 18 year not a single year blip.  Way too risky for my appetite.

Spivo46

Qyburn said:

Spivo46 said:

Really interesting. The fixed term rates are amazing. Moneyhelper annuity tool, try a £300k purchase over 20 years. A DC pension drawdown doesnt come close

What do you do after 20 years?

How much do you need at 85? 

Takedap

Spivo46 said:

Qyburn said:Spivo46 said:

Really interesting. The fixed term rates are amazing. Moneyhelper annuity tool, try a £300k purchase over 20 years. A DC pension drawdown doesnt come close

What do you do after 20 years?

How much do you need at 85? 

How much do you need at 84?   Or 83?  What changes on these birthdays?  Do your expenses go down because you feel like doing less or do they go up because you can do less but have to pay someone to do it?

Bimbly

Qyburn said:

What do you do after 20 years?

You could decide that equity release is suitable at that age. Or you might get an inheritance. Or you might be planning big holidays etc in early retirement with more sedate plans later on.

Not to take away the validity of your point, which is a good one.