Annuity - should be simple

g002ahe

I want to take some of my current SIPP pot (held in ii) and buy an annuity.

So, I fed the details into moneyhelper, and I found that Standard Life (SL) is the best for me. This was great so far and I was ready to go ahead.

Anyway, so I took the link from moneyhelper to SL, and then:

1) could not find any info on how to start an annuity, the website is confusing. tried a few menus/help etc.
2) rang the number they gave me to talk to someone. literally i had to bust through the automated voice as it kept asking me for my SL plan number.. anyway, finally got through.
3) explained what I wanted to do and was (eventually) told, "no that's not possible directly you have to go through a FA."
4) I responded that this was not going to happen. and the conversation ended.

I then tried moneyhelper chat to get advice but they said they couldn't help. I should contact the provider directly.

Why is this so hard? I am happy to transfer part of my pension to a SL pension first of course, if that is the process. but no option was discussed or given.

The website does allow you to transfer your SIPP to them, but only if you havn't taken any money out (i have crystallised some for a TFLS). in this case they refer you to the same phone number as i rang for the annuity.

Is it worth persisting or does anyone know another way? My second best choice was L&G and it wasn't that much different so I might just try them instead.

HappyHarry

g002ahe said:

I want to take some of my current SIPP pot (held in ii) and buy an annuity.

So, I fed the details into moneyhelper, and I found that Standard Life (SL) is the best for me. This was great so far and I was ready to go ahead.

Anyway, so I took the link from moneyhelper to SL, and then:

1) could not find any info on how to start an annuity, the website is confusing. tried a few menus/help etc.
2) rang the number they gave me to talk to someone. literally i had to bust through the automated voice as it kept asking me for my SL plan number.. anyway, finally got through.
3) explained what I wanted to do and was (eventually) told, "no that's not possible directly you have to go through a FA."
4) I responded that this was not going to happen. and the conversation ended.

I then tried moneyhelper chat to get advice but they said they couldn't help. I should contact the provider directly.

Why is this so hard? I am happy to transfer part of my pension to a SL pension first of course, if that is the process. but no option was discussed or given.

The website does allow you to transfer your SIPP to them, but only if you havn't taken any money out (i have crystallised some for a TFLS). in this case they refer you to the same phone number as i rang for the annuity.

Is it worth persisting or does anyone know another way? My second best choice was L&G and it wasn't that much different so I might just try them instead.

Standard Life do not retail annuities directly unless you currently have your pension with them. As your pension is with ii you will need to use an adviser. This is not a bad thing as advisers will usually be able to get you a better rate than you could directly.

Make sure you use an IFA rather than an FA.

g002ahe

HappyHarry said:

Standard Life do not retail annuities directly unless you currently have your pension with them. As your pension is with ii you will need to use an adviser. This is not a bad thing as advisers will usually be able to get you a better rate than you could directly.

Make sure you use an IFA rather than an FA.

I do not want or need an IFA. I will perhaps try a broker.

Pat38493

HappyHarry said:

g002ahe said:

I want to take some of my current SIPP pot (held in ii) and buy an annuity.

So, I fed the details into moneyhelper, and I found that Standard Life (SL) is the best for me. This was great so far and I was ready to go ahead.

Anyway, so I took the link from moneyhelper to SL, and then:

1) could not find any info on how to start an annuity, the website is confusing. tried a few menus/help etc.
2) rang the number they gave me to talk to someone. literally i had to bust through the automated voice as it kept asking me for my SL plan number.. anyway, finally got through.
3) explained what I wanted to do and was (eventually) told, "no that's not possible directly you have to go through a FA."
4) I responded that this was not going to happen. and the conversation ended.

I then tried moneyhelper chat to get advice but they said they couldn't help. I should contact the provider directly.

Why is this so hard? I am happy to transfer part of my pension to a SL pension first of course, if that is the process. but no option was discussed or given.

The website does allow you to transfer your SIPP to them, but only if you havn't taken any money out (i have crystallised some for a TFLS). in this case they refer you to the same phone number as i rang for the annuity.

Is it worth persisting or does anyone know another way? My second best choice was L&G and it wasn't that much different so I might just try them instead.

Standard Life do not retail annuities directly unless you currently have your pension with them. As your pension is with ii you will need to use an adviser. This is not a bad thing as advisers will usually be able to get you a better rate than you could directly.

Make sure you use an IFA rather than an FA.

We’ve seen posts on here that sometimes it can work out cheaper to use an IFA to buy an annuity even after factoring in their advice fees, especially if there are increases for ill health or suchlike involved.

But are IFA allowed to sell an annuity as a discrete instruction from the client or do they have to look into your whole finances so that they can warn you if they think that buying an annuity is not the right thing for you?

xylophone

I do not want or need an IFA. I will perhaps try a broker.

Don't close your mind - make some enquiries first? 

Is below worth a try?

https://www.onlinemoneyadvisor.co.uk/pensions/pension-annuities/annuity-costs/

Or https://adviserbook.co.uk/

You can tick "confirmed independent".

flaneurs_lobster

I'm using HUB Financial Solutions as an annuity broker, didn't feel the need for advice since it's for a small pot and wanted a vanilla product.

I've been impressed with the professionalism of their operation, the quality of their documentation and their online tools. 

My opinion could change of course, the chosen annuity is still being finalised (with Standard Life).

dunstonh

So, I fed the details into moneyhelper, and I found that Standard Life (SL) is the best for me. This was great so far and I was ready to go ahead.

For SL to come out top is unusual.     Although moneyhelper tables are often different to the commercial quote engines used by IFAs.  Plus, SL do hit a particular niche.  i.e. you seem them nowhere in the comparisons and then out of the blue a certain set of circumstances (more often no health or lifestyle declarations) and they do better.

1) could not find any info on how to start an annuity, the website is confusing. tried a few menus/help etc.

They dont retail their product direct to consumer.   So, there won't be much.  They also have sites aimed at advisers. So, the content will be written per the target market.

3) explained what I wanted to do and was (eventually) told, "no that's not possible directly you have to go through a FA."
4) I responded that this was not going to happen. and the conversation ended.

Why would you not go through an adviser?  For most cases (all but the smallest) that is the typically the best way to get an annuity.

Why is this so hard? I am happy to transfer part of my pension to a SL pension first of course, if that is the process. but no option was discussed or given.

Its not hard.   Most annuity providers retail via IFAs or intermediaries.    They are effectively the shops.   You have tried bypassing the shop to buy from the manufacturer but the manufacturer does not retail to the public.

I do not want or need an IFA. I will perhaps try a broker.

That could give you a worse outcome.    Brokers take a commission. IFAs take a fee.  Both use the same quote engines.   If the fee is less than the commission, the IFA should come out better or vice versa.

But are IFA allowed to sell an annuity as a discrete instruction from the client or do they have to look into your whole finances so that they can warn you if they think that buying an annuity is not the right thing for you?

It can be a much shortened process compared to say drawdown.

I'm using HUB Financial Solutions as an annuity broker, didn't feel the need for advice since it's for a small pot and wanted a vanilla product.

Small pots (typically under £30k) do typically favour the online brokers.    Larger pots do typically favour IFAs.
Medical cases tend to be better via IFAs as well.

sgx2000

Dunstonh
What are your thoughts on an individual going straight to a pension provider via HL?

FIREDreamer

My SIPP is with Hargreaves Lansdown. On their quote engine, Just Annuities came up tops for an RPI joint life 50% spouse annuity. They were 5% higher than the nearest competitor Legal and General. Standard Life was bottom at 12% less.

Annuity rate is 3.77% at age 59.

Commission is about 0.8% of the purchase price.

Hargreaves have transferred the money to Just so I can FIRE when I want. Drawdown would give me more income but it’s not guaranteed so I don’t need financial market worries in retirement.

I don’t think I got a bad deal there.

dunstonh

sgx2000 said:

Dunstonh
What are your thoughts on an individual going straight to a pension provider via HL?

For clarification, you wouldn't be going straight to a pension provider via HL.    HL will use the same method IFAs use except it will be streamlined for non-advised direct-to-client (assuming you don't mean their advice service - which will have the same requirements that an advised service from an IFA would have).

I am sure HL would do a very good job.   I have sent the odd enquiry their way when the amounts were not viable for me to do it.
I have only been up against HL on two occasions and on one of them we got pretty much identical figures and on the other we got higher (despite our fee being higher than their commission).   I put that down to medical details disclosure being better as I didn't accept the medical questions given but probed and got quite a bit more than was given initially and the rate improved significantly.  Plus, we used a provider that was one that is known to usually offer better rates when you go via their broker consultants and has a margin to improve terms.    I would imagine HL's advice service would have done similar but their direct to consumer service didn't as, being non-advised, it accepted what the individual had given them and the rates generated.

My most recent case also saw a new client using us and one of the other major online sites for annuities.  We initially quoted around £8500 to get a starting point and the online site quoted £12,000.    I could see immediately, that the online site had just done the basic "has medical conditions" quote which automatically goes to the best rate possible and there was no way they were going to get that.   The client went on to give us the same information (which was woefully inadequate with lots of gaps) and the quotes came in similar at around £8700.   I got ours upto just under £9600 in the end and it was a hard slog as the person was reluctant to answer the medical conditions in many of the areas where the data improves the rates.  It took a lot of manual intervention and discussion.   I reckon that is probably the main area where advised can beat non advised.     

if its clean health cases, then the margins of differences are going to be tiny unless its a large case where the IFA caps their fee and the online service doesnt cap their commission.

flaneurs_lobster

dunstonh said:

My most recent case also saw a new client using us and one of the other major online sites for annuities.  We initially quoted around £8500 to get a starting point and the online site quoted £12,000.    I could see immediately, that the online site had just done the basic "has medical conditions" quote which automatically goes to the best rate possible and there was no way they were going to get that.   The client went on to give us the same information (which was woefully inadequate with lots of gaps) and the quotes came in similar at around £8700.   I got ours upto just under £9600 in the end and it was a hard slog as the person was reluctant to answer the medical conditions in many of the areas where the data improves the rates.  It took a lot of manual intervention and discussion.   I reckon that is probably the main area where advised can beat non advised.     

It does sound as if you were conducting a medical examination rather than a financial one. 

I can understand the reluctance of many people when it comes to divulging personal medical/lifestyle histories, some people don't even tell their spouses or doctors this stuff, let alone financial advisors. It can be counterintuitive that telling someone about all the "bad stuff" can lead to a financial advantage.