Fixed Term Annuity - Use Part of Drawdown, Or The Whole Hog in This Product?

GSP

Malthusian said:

Presumably the life insurance has been compared with the cost of taking out the annuity with a 5 year guarantee period or 100% Value Protection? 
If the adviser is also proposing to take commission for setting up a life insurance policy it sounds a leetle like double dipping, although it is theoretically possible that the cost of the separate life insurance policy could be lower than the extra income from a fixed term annuity with no death benefits.
Although a separate life insurance policy also means a separate underwriting process. Are you going to get the life insurance on-risk first before you get the annuity in place? Otherwise you can't know for sure that it will be cheaper than building the insurance into the annuity.

Our IFA quote is suggesting going along with L&G with their built in protection, which would seem easier and ‘cleaner’ as well so we will probably go for this company now.

Trapdoor

Just an update to this thread…

My application to Canada Life was sent in by my IFA and they have instigated the funds transfer from my SIPP provider. It looks like I managed to get it in under the original guaranteed quote before the annuity rates dropped … I guess I’ll only know for sure once they transfer my first monthly payment, but my IFA is confident they will honour the quote.

Apparently they take the full value of the SIPP and then pay the 25% PCLS back … it’s then over to my IFA to sort out the Pru Bond with the TFLS amount to top up the Canada Life monthly payment.

Hoping this all goes smoothly, and whilst this may not be a ‘popular’ choice for retirement funds for most people, it fits my current outlook on life and concerns about the future of investments.

GSP

Trapdoor said:

Just an update to this thread…

My application to Canada Life was sent in by my IFA and they have instigated the funds transfer from my SIPP provider. It looks like I managed to get it in under the original guaranteed quote before the annuity rates dropped … I guess I’ll only know for sure once they transfer my first monthly payment, but my IFA is confident they will honour the quote.

Apparently they take the full value of the SIPP and then pay the 25% PCLS back … it’s then over to my IFA to sort out the Pru Bond with the TFLS amount to top up the Canada Life monthly payment.

Hoping this all goes smoothly, and whilst this may not be a ‘popular’ choice for retirement funds for most people, it fits my current outlook on life and concerns about the future of investments.

Good stuff Trapdoor, and hoping that first monthly payment is what you expect.

My end, I saw my IFA yesterday and they are now putting through a 5 year fixed annuity with L&G. The rate I believe was 6.89% with a guaranteed maturity value, but I am on tenterhooks at the moment as the amount I give to L&G is altering as it’s still being changed from investment to cash before the transfer to L&G. 

I wanted them to do this in the first instance to restrict market risk, but it hasn’t been a good day in the markets and there will be less money received by L&G meaning less for me.

Spivo46

GSP said:

Malthusian said:

Presumably the life insurance has been compared with the cost of taking out the annuity with a 5 year guarantee period or 100% Value Protection? 
If the adviser is also proposing to take commission for setting up a life insurance policy it sounds a leetle like double dipping, although it is theoretically possible that the cost of the separate life insurance policy could be lower than the extra income from a fixed term annuity with no death benefits.
Although a separate life insurance policy also means a separate underwriting process. Are you going to get the life insurance on-risk first before you get the annuity in place? Otherwise you can't know for sure that it will be cheaper than building the insurance into the annuity.

Our IFA quote is suggesting going along with L&G with their built in protection, which would seem easier and ‘cleaner’ as well so we will probably go for this company now.

L&G wanted 3% of the sum paid for the annuity - in my case over 10k !! L&G are just a broker that checks the open market for the best deal

Trapdoor

GSP said:

Good stuff Trapdoor, and hoping that first monthly payment is what you expect.

My end, I saw my IFA yesterday and they are now putting through a 5 year fixed annuity with L&G. The rate I believe was 6.89% with a guaranteed maturity value, but I am on tenterhooks at the moment as the amount I give to L&G is altering as it’s still being changed from investment to cash before the transfer to L&G. 

I wanted them to do this in the first instance to restrict market risk, but it hasn’t been a good day in the markets and there will be less money received by L&G meaning less for me.

I had a very similar issue with the conversion to cash, and in fact I’m in dispute with my IFA (or more accurately the company he works for) because it took their admin team well over a week for my instruction to sell down to cash to be actioned, and I lost about 6 or 7k due to market movements. I was told it would take a day to sell down and checking each day I reckon if it had been sold when it should have, it would have been slightly up. 

Very frustrating, because we have to rely on others to act on our behalf and in our best interest, yet there seems to be no commitment to do so. I have been told it will be ‘put right’ and I won’t lose financially but can’t see how that’ll work now Canada Life have transferred the funds.

Good luck with your purchase and hope it all goes to plan.

GSP

Trapdoor said:

GSP said:

Good stuff Trapdoor, and hoping that first monthly payment is what you expect.

My end, I saw my IFA yesterday and they are now putting through a 5 year fixed annuity with L&G. The rate I believe was 6.89% with a guaranteed maturity value, but I am on tenterhooks at the moment as the amount I give to L&G is altering as it’s still being changed from investment to cash before the transfer to L&G. 

I wanted them to do this in the first instance to restrict market risk, but it hasn’t been a good day in the markets and there will be less money received by L&G meaning less for me.

I had a very similar issue with the conversion to cash, and in fact I’m in dispute with my IFA (or more accurately the company he works for) because it took their admin team well over a week for my instruction to sell down to cash to be actioned, and I lost about 6 or 7k due to market movements. I was told it would take a day to sell down and checking each day I reckon if it had been sold when it should have, it would have been slightly up. 

Very frustrating, because we have to rely on others to act on our behalf and in our best interest, yet there seems to be no commitment to do so. I have been told it will be ‘put right’ and I won’t lose financially but can’t see how that’ll work now Canada Life have transferred the funds.

Good luck with your purchase and hope it all goes to plan.

Thanks Trapdoor,

Currently I (we) are watching the markets go down. I can see about two thirds of my investments are in cash now, but there’s still the conversion of taking out my tax free cash, and the conversion of those investments into cash.

I am about £6k down from a couple of days ago which is not an unusual movement by any means, it just means I can less money hitting my account for the next five years when this is all done.

I can’t wait until it is!

There was a mention of a 30 day cooling off period. Now I have no intention of halting this annuity, but in unprecedented times and expecting the unexpected, who knows where things will be in a couple of weeks, particularly now.
It would not happen, but say for example if the BoE put rates up another 2% on 2nd November because of ‘volatile events’ or action, if I was able to I might rip up this agreement and take the new set of annuity numbers, if I could.