Small pension - Can an IFA really do better?

sgx2000

Hi All
I have been looking at Annuities 

For a pot of £78200 -  single life, 10 year garantee, RPI , Including medical details

I have got quotes on HL between £3786.72  and £3068..88 - L&G top quote

Realistically could an IFA make any real difference for such a small pot?
How much would an IFA cost?

My current workplace pension is with Aviva

How much 'faf' is involved moving the pot to an annuity provider?
When the annuity provider has given a 'real' quote, do they stick to it for a period, or does it change on the day it becomes payable?

FIREDreamer

sgx2000 said:

Hi All
I have been looking at Annuities 

For a pot of £78200 -  single life, 10 year garantee, RPI , Including medical details

I have got quotes on HL between £3786.72  and £3068..88 - L&G top quote

Realistically could an IFA make any real difference for such a small pot?
How much would an IFA cost?

My current workplace pension is with Aviva

How much 'faf' is involved moving the pot to an annuity provider?
When the annuity provider has given a 'real' quote, do they stick to it for a period, or does it change on the day it becomes payable?

If you look at the generated documents for each quote it tells you how long it is guaranteed for. Just Annuities seems to guarantee for 6 weeks if they receive the paperwork from HL within about 10 days.

I have gone with a Just Annuities quote.

Generated 23 August
Reach HL by 6 September 
Rate guaranteed to 6 October

Annuity monthly in arrears so first payment due 23 September so I assume the payments will be backdated to this date if there is a delay in setting up the annuity, eg two instalments if payment made on 23 October so I don’t lose a month’s annuity.

sgx2000

FIREDreamer said:

sgx2000 said:

Hi All
I have been looking at Annuities 

For a pot of £78200 -  single life, 10 year garantee, RPI , Including medical details

I have got quotes on HL between £3786.72  and £3068..88 - L&G top quote

Realistically could an IFA make any real difference for such a small pot?
How much would an IFA cost?

My current workplace pension is with Aviva

How much 'faf' is involved moving the pot to an annuity provider?
When the annuity provider has given a 'real' quote, do they stick to it for a period, or does it change on the day it becomes payable?

If you look at the generated documents for each quote it tells you how long it is guaranteed for. Just Annuities seems to guarantee for 6 weeks if they receive the paperwork from HL within about 10 days.

I have gone with a Just Annuities quote.

Generated 23 August
Reach HL by 6 September 
Rate guaranteed to 6 October

Annuity monthly in arrears so first payment due 23 September so I assume the payments will be backdated to this date if there is a delay in setting up the annuity, eg two instalments if payment made on 23 October so I don’t lose a month’s annuity.

Thanks for the reply...
Is your pension with HL?
Or are they the middleman?
Would you get better going straight to Just?

I have been toying with this for quite a while now.
2.5 years before my SPA but think annuity gives some certainty in this increasingly uncertain world

dunstonh

Realistically could an IFA make any real difference for such a small pot?
How much would an IFA cost?

The two things where an IFA can make the main difference is fee vs commission and enhanced annuities.

Non-advised annuities take a commission.  So, you are getting an annuity rate that has a commission factored into it.
advised annuities cannot take commission.  So you are getting an annuity rate that is commission-free.  However, the adviser fee is typically taken from the pot
So, broadly speaking a 2% adviser fee would yield a similar outcome to a 2% commission rate.

A lot of IFAs have a cap and collar or tiering on the adviser fee.   Whereas commission tends to be flat rate on the whole amount.  So, commission can often be cheaper on smaller pots but fees better on larger pots.

However, its not as simple as that.   A few years back, I had a client who got quotes from HL and myself.   There were lifestyle/health issues.     My fee was higher than the HL commission but I got a higher annuity rate.   I personally put that down to the fact, that I didn't just go by what the computer-generated (which is what most of the direct to consumer ones do - ie info input = result and that is what you get).  I delved deaper into the health issues and obtained further info which improved the rate.  Plus, I then got the hagglers to see if they could improve (some annuity providers haggle - not as much as they used to though) and the outcome was a better annuity rate despite the fee being greater.   If it had been clean health then it would have been unlikely that the rate I obtained would have been better.

Would you get better going straight to Just?

You cannot go to Just.  They retail via intermediaries.  Although Just do have a salesforce arm that acts as intermediaries I believe.
Just is probably the best annuity provider in terms of service.  However, I haven't seen them come out top for a very long time. 

I have three annuity quotes on the go at the moment.  All with different health issues (from minor to extensive) and Just is coming out around 5th place on all three.   Despite Just uplifting it to their maximum possible over the computer output

Annuity monthly in arrears so first payment due 23 September so I assume the payments will be backdated to this date if there is a delay in setting up the annuity, eg two instalments if payment made on 23 October so I don’t lose a month’s annuity.

Monthly in arrears usually means one month from receipt of funds.  Not one month from the quote date.
I haven't done one with Just for a while but they used to pay an interim payment to get you to the their one payment date in the month and then monthly on that date thereafter.

sgx2000

Thanks Dunstonh....

FIREDreamer

sgx2000 said:

FIREDreamer said:

sgx2000 said:

Hi All
I have been looking at Annuities 

For a pot of £78200 -  single life, 10 year garantee, RPI , Including medical details

I have got quotes on HL between £3786.72  and £3068..88 - L&G top quote

Realistically could an IFA make any real difference for such a small pot?
How much would an IFA cost?

My current workplace pension is with Aviva

How much 'faf' is involved moving the pot to an annuity provider?
When the annuity provider has given a 'real' quote, do they stick to it for a period, or does it change on the day it becomes payable?

If you look at the generated documents for each quote it tells you how long it is guaranteed for. Just Annuities seems to guarantee for 6 weeks if they receive the paperwork from HL within about 10 days.

I have gone with a Just Annuities quote.

Generated 23 August
Reach HL by 6 September 
Rate guaranteed to 6 October

Annuity monthly in arrears so first payment due 23 September so I assume the payments will be backdated to this date if there is a delay in setting up the annuity, eg two instalments if payment made on 23 October so I don’t lose a month’s annuity.

Thanks for the reply...
Is your pension with HL?
Or are they the middleman?
Would you get better going straight to Just?

I have been toying with this for quite a while now.
2.5 years before my SPA but think annuity gives some certainty in this increasingly uncertain world

My SIPP is with Hargreaves Lansdown.

Just are through intermediaries only, of which Hargreaves Lansdown is one.

Just was the best quote for me, about 8% greater than the next best L&G. Also rans were Aviva, Scottish Widows, Canada Life and Standard Life came last.

I seem to have applied at a sweet spot because the JL RPI annuity available now has come down slightly. (*)

This is 65% of my crystallised pot. The rest remains invested in global equity ETFs VWRL and HMWO.

Before I retire I will top up my pension with 80% of my post salary sacrifice salary. Annuity income does not count for pension contributions.

(*) EDIT: If I had gone to an IFA I may miss out on a possible peak in annuity rates and didn’t want to miss out on what I could get using Hargreaves Lansdown.

sgx2000

(*) EDIT: If I had gone to an IFA I may miss out on a possible peak in annuity rates and didn’t want to miss out on what I could get using Hargreaves Lansdown.

Just what I was thinking...   
Better locking into a RPI linked annuity a couple of years before SPA,  than some rediculoue political decision trashing my pension fund the week before I retire.....