Anyone Have Access to Fixed Term Annuity Calculators?

GSP

Without signing up to anything and giving away my details, I was hoping someone could provide a link or know how to gain access to one of the few providers for these products so I can interrogate the system with a number of scenario’s, but these I assume are mainly available to IFA’s, at a cost.

More specifically, I am interested in L&G’s no income plans. I have read from a poster called David that he signed up for 3 years receiving no income and will receive 15% back on top. I wondered what the outcome would be for longer than 3 years etc.

Thanks

Linton

I doubt you would find anything since there are too many variables and there wont be much demand or competition.  Also you may well find that an annuity from an IFA is much  the same or possibly cheaper than direct since if you go direct the pension company will have to allow for their extra costs for dealing with a direct customer.

However a rough calculation is not too difficult.  Annuities are funded from very safe bonds.  I guess from the numbers David bought his 3 year annuity around October last year when 3 year government bond interest rates peaked at around 4.6%.

3 years at 4.6% compounded gives 14.4% overall.  We may have to take into account that some of the purchasers will die before the end of 3 years but I dont know what the annuity does about that. Also we dont know how old David is and hence his chance of dying..  Finally David's calculation may not be exact.  So I suggest a fair enough estimate.

Now equivalent interest rates are at about 3.2%.  So for N years that gives a no income total return of 100*((1.032)^N - 1)%.  For N=3 that is about 10%.  You can calculate other values of N.

Of course you may have got much the same return by buying the underlying bonds yourself.

Generally annuities become of greater interest when you reach an age of say 85 by which time you get the benefits of people losing out by dying.  Unless of course you die yourself.