Annuity Cost - Hargreaves Lansdown

FIREDreamer

Is £5,000 to set up an annuity for a £640k fund reasonable?

Would a local IFA be much cheaper than this or is this about the right ball park?

Hargreaves seem to quote over all the key players so i dont think an IFA could improve the quotes?

Ciprico

Can't answer your question but would be interested to know what the annuity is offering

FIREDreamer

Ciprico said:

Can't answer your question but would be interested to know what the annuity is offering

3.5% at age 60, RPI, 50% spouse, 10 year guarantee.

Pat38493

As I’ve just posted on another thread, it’s been stated on here quite a few times that IFAs can often get a better deal on annuities (even after taking into account their fees) than you can get on your own.  I’m not sure why, but I’ve seen it mentioned quite a few times on this board.

dunstonh

Is £5,000 to set up an annuity for a £640k fund reasonable?

Non-advised sales can still take commission and that is usually a percentage that doesnt vary with the amount.

Would a local IFA be much cheaper than this or is this about the right ball park?

Could be.   An IFA fee could be half that.

Hargreaves seem to quote over all the key players so i dont think an IFA could improve the quotes?

Last time I was up against HL with a client getting quotes from them and us, we came in with a better quote.  I put it down to the fact we went deeper into the health questionnaire as there were some bits missing and we used a provider that haggled on price.

However, if you get a local IFA to do it at a more reasonable advice cost of around £2500 then that alone will improve the annuity rate.  So, it will be worth having a word with a firm local to you.  

FIREDreamer

I have expressed the commissions as a percentage of the purchase cost for all the quotes. Most are 0.78%, one is 0.80% and one outlier is 0.42% (the lowest quote, 5% worse than the best!) …

xylophone

For a local adviser you could try

https://adviserbook.co.uk/

Tick "confirmed independent" and other specialisms required.

zagfles

Pat38493 said:

As I’ve just posted on another thread, it’s been stated on here quite a few times that IFAs can often get a better deal on annuities (even after taking into account their fees) than you can get on your own.  I’m not sure why, but I’ve seen it mentioned quite a few times on this board.

Yes. Usually by IFAs

See thread linked below - OP of that thread was quoted 4% IFA fee, OP of this thread under 1% non-advised commission

https://forums.moneysavingexpert.com/discussion/6465345/does-this-ifas-service-seem-good-enough-to-you#latest

FIREDreamer

zagfles said:

Pat38493 said:

As I’ve just posted on another thread, it’s been stated on here quite a few times that IFAs can often get a better deal on annuities (even after taking into account their fees) than you can get on your own.  I’m not sure why, but I’ve seen it mentioned quite a few times on this board.

Yes. Usually by IFAs

See thread linked below - OP of that thread was quoted 4% IFA fee, OP of this thread under 1% non-advised commission

https://forums.moneysavingexpert.com/discussion/6465345/does-this-ifas-service-seem-good-enough-to-you#latest

Hargreaves Lansdown’s 0.80% or 0.78% seems quite reasonable then.

dunstonh

FIREDreamer said:

zagfles said:

Pat38493 said:

As I’ve just posted on another thread, it’s been stated on here quite a few times that IFAs can often get a better deal on annuities (even after taking into account their fees) than you can get on your own.  I’m not sure why, but I’ve seen it mentioned quite a few times on this board.

Yes. Usually by IFAs

See thread linked below - OP of that thread was quoted 4% IFA fee, OP of this thread under 1% non-advised commission

https://forums.moneysavingexpert.com/discussion/6465345/does-this-ifas-service-seem-good-enough-to-you#latest

Hargreaves Lansdown’s 0.80% or 0.78% seems quite reasonable then.

Compared to that one yes but compared to others, no.

Qyburn

FIREDreamer said:

I have expressed the commissions as a percentage of the purchase cost for all the quotes. Most are 0.78%, one is 0.80% and one outlier is 0.42% (the lowest quote, 5% worse than the best!) …

Are the figures quoted by HL net of commission? For example say they quote £10k/year, is that after commission is taken or do you get a separate bill for the 0.8%?