Just can't decide between Drawdown, lifetime or fixed term annuity!

epsilon4900

dunstonh said:

Thanks Dunston. I think I need to see which IFAs will give me a quote for a lifetime annuity and their fee so I can compare it with what the online annuity brokers tell me? I wonder if they charge for that though? I mean just to quote?

IFAs will tell you their fees.  Some will be greedy. Some will not be.   

I don't pay say HL just for a quote only if I go ahead? Could that be the same with an IFA? 

If you ask an IFA to do it on an execution basis and ask for a quote, some will do it.  Some may not be interested.

Thanks that's a great tip. 

epsilon4900

poseidon1 said:

dunstonh said:

Sorry to hijack but can you explain this bit to me please?

A lot of people buying fixed term annuities do so on the basis of buying another one each time they hit the maturity point.   So, at each rollover point, they get the terms on offer at that time.   The annuity rates could be higher at that time or they could be lower.  That is unknown.   

Higher annuity rates at that time, would work in their favour.    As could a decline in their health which qualifies them for an enhanced annuity rate.     In those scenarios, a fixed-term annuity could work out more favourably.

However, if annuity rates are lower and they don't qualify for enhanced annuity rates, then the new terms would not be as attractive.    In that scenario, a lifetime annuity could work out more favourably.

There is also some provider risk here.  There are very few providers that offer fixed-term annuities.   None of the providers give you confidence for being around for the long term.  Not for payment, that isn't the issue but whether they or the product itself will exist in the future.   i.e. when you get to maturity, will you even be able to buy another fixed-term annuity?

Legal & General appears to be a fixed term annuity provider.

No idea how competitive their terms are in what is apparently a small market, but if I were in the market for such a product and chose them I would have full confidence in their being around at the end of the term.

 Of course the business model for fixed term annuities may change radically in the interim, so no guarantee that they would be able to offer a similar product at maturity , but no doubt in the OP's circumstances later down the line, a lifetime annuity might make more sense anyway ( subject to reasonable rates at the time).

I think what I would be more concerned about, if l were in the market for any kind of annuity is the increasing  pace of consolidation in the UK  Life & Pensions insurance industry, which is having a detrimental affect on consumer choice.

As more and more firms merge, close or mopped up by bigger competitors (without new participants entering the market place), not difficult to see an increasingly  non competive oligopoly begin to emerge. Most consumers would be blissfully unaware that this is occurring, or how it might affect the kind of deals available to them going forward.

poseidon1 said:

dunstonh said:

Sorry to hijack but can you explain this bit to me please?

A lot of people buying fixed term annuities do so on the basis of buying another one each time they hit the maturity point.   So, at each rollover point, they get the terms on offer at that time.   The annuity rates could be higher at that time or they could be lower.  That is unknown.   

Higher annuity rates at that time, would work in their favour.    As could a decline in their health which qualifies them for an enhanced annuity rate.     In those scenarios, a fixed-term annuity could work out more favourably.

However, if annuity rates are lower and they don't qualify for enhanced annuity rates, then the new terms would not be as attractive.    In that scenario, a lifetime annuity could work out more favourably.

There is also some provider risk here.  There are very few providers that offer fixed-term annuities.   None of the providers give you confidence for being around for the long term.  Not for payment, that isn't the issue but whether they or the product itself will exist in the future.   i.e. when you get to maturity, will you even be able to buy another fixed-term annuity?

Legal & General appears to be a fixed term annuity provider.

No idea how competitive their terms are in what is apparently a small market, but if I were in the market for such a product and chose them I would have full confidence in their being around at the end of the term.

 Of course the business model for fixed term annuities may change radically in the interim, so no guarantee that they would be able to offer a similar product at maturity , but no doubt in the OP's circumstances later down the line, a lifetime annuity might make more sense anyway ( subject to reasonable rates at the time).

I think what I would be more concerned about, if l were in the market for any kind of annuity is the increasing  pace of consolidation in the UK  Life & Pensions insurance industry, which is having a detrimental affect on consumer choice.

As more and more firms merge, close or mopped up by bigger competitors (without new participants entering the market place), not difficult to see an increasingly  non competive oligopoly begin to emerge. Most consumers would be blissfully unaware that this is occurring, or how it might affect the kind of deals available to them going forward.

I seem to recall that Legal and General did not want to deal with me directly they kept pushing me towards their comparison brokerage  ANNUITY READY? Trouble is that irrespective of which company of the 6 or so came top not all of them will deal with a punter like myself directly. It felt a bit messy really. 

epsilon4900

zagfles said:

Some annuity brokers will refund part of the commission rather than just pocketing it all as implied above. See 
I'm buying an annuity with a £55k pot - why does my broker gets a commission? | This is Money
It's worth shopping around and seeing what you can get yourself, then maybe see if an IFA can beat it. 

Also if using a IFA it's worth doing a quick check for ombudsman decisions against them:https://www.financial-ombudsman.org.uk/decisions-case-studies/ombudsman-decisions

More great tips. I should market test some IFAs and get the best quotes I can from annuity brokers. I've done some of that already with regard to the annuity brokers BUT I have not sounded out what IFA's feel they can offer me to try to get my business and justify their fee/s whatever they may be. I realize I need to do this work too and haven't as yet.
Thanks again for all this great advice! Much obliged.

epsilon4900

Also will discuss with annuity brokers if any will consider reimbursing part or all of their commission as a means to get my business.

poseidon1

epsilon4900 said:

poseidon1 said:

dunstonh said:

Sorry to hijack but can you explain this bit to me please?

A lot of people buying fixed term annuities do so on the basis of buying another one each time they hit the maturity point.   So, at each rollover point, they get the terms on offer at that time.   The annuity rates could be higher at that time or they could be lower.  That is unknown.   

Higher annuity rates at that time, would work in their favour.    As could a decline in their health which qualifies them for an enhanced annuity rate.     In those scenarios, a fixed-term annuity could work out more favourably.

However, if annuity rates are lower and they don't qualify for enhanced annuity rates, then the new terms would not be as attractive.    In that scenario, a lifetime annuity could work out more favourably.

There is also some provider risk here.  There are very few providers that offer fixed-term annuities.   None of the providers give you confidence for being around for the long term.  Not for payment, that isn't the issue but whether they or the product itself will exist in the future.   i.e. when you get to maturity, will you even be able to buy another fixed-term annuity?

Legal & General appears to be a fixed term annuity provider.

No idea how competitive their terms are in what is apparently a small market, but if I were in the market for such a product and chose them I would have full confidence in their being around at the end of the term.

 Of course the business model for fixed term annuities may change radically in the interim, so no guarantee that they would be able to offer a similar product at maturity , but no doubt in the OP's circumstances later down the line, a lifetime annuity might make more sense anyway ( subject to reasonable rates at the time).

I think what I would be more concerned about, if l were in the market for any kind of annuity is the increasing  pace of consolidation in the UK  Life & Pensions insurance industry, which is having a detrimental affect on consumer choice.

As more and more firms merge, close or mopped up by bigger competitors (without new participants entering the market place), not difficult to see an increasingly  non competive oligopoly begin to emerge. Most consumers would be blissfully unaware that this is occurring, or how it might affect the kind of deals available to them going forward.

poseidon1 said:

dunstonh said:

Sorry to hijack but can you explain this bit to me please?

A lot of people buying fixed term annuities do so on the basis of buying another one each time they hit the maturity point.   So, at each rollover point, they get the terms on offer at that time.   The annuity rates could be higher at that time or they could be lower.  That is unknown.   

Higher annuity rates at that time, would work in their favour.    As could a decline in their health which qualifies them for an enhanced annuity rate.     In those scenarios, a fixed-term annuity could work out more favourably.

However, if annuity rates are lower and they don't qualify for enhanced annuity rates, then the new terms would not be as attractive.    In that scenario, a lifetime annuity could work out more favourably.

There is also some provider risk here.  There are very few providers that offer fixed-term annuities.   None of the providers give you confidence for being around for the long term.  Not for payment, that isn't the issue but whether they or the product itself will exist in the future.   i.e. when you get to maturity, will you even be able to buy another fixed-term annuity?

Legal & General appears to be a fixed term annuity provider.

No idea how competitive their terms are in what is apparently a small market, but if I were in the market for such a product and chose them I would have full confidence in their being around at the end of the term.

 Of course the business model for fixed term annuities may change radically in the interim, so no guarantee that they would be able to offer a similar product at maturity , but no doubt in the OP's circumstances later down the line, a lifetime annuity might make more sense anyway ( subject to reasonable rates at the time).

I think what I would be more concerned about, if l were in the market for any kind of annuity is the increasing  pace of consolidation in the UK  Life & Pensions insurance industry, which is having a detrimental affect on consumer choice.

As more and more firms merge, close or mopped up by bigger competitors (without new participants entering the market place), not difficult to see an increasingly  non competive oligopoly begin to emerge. Most consumers would be blissfully unaware that this is occurring, or how it might affect the kind of deals available to them going forward.

I seem to recall that Legal and General did not want to deal with me directly they kept pushing me towards their comparison brokerage  ANNUITY READY? Trouble is that irrespective of which company of the 6 or so came top not all of them will deal with a punter like myself directly. It felt a bit messy really. 

That's curious. See below link to L & G's annuity quote tool. Once you get a quote they then invite you to talk to one of their own in house advisers as well talk to other providers for comparison quotes!

Seems to be a pretty soft sell if you ask me.

https://www.legalandgeneral.com/retirement/pension-annuity/pension-annuity-calculator/

dunstonh

Legal & General appears to be a fixed term annuity provider.
No idea how competitive their terms are in what is apparently a small market, but if I were in the market for such a product and chose them I would have full confidence in their being around at the end of the term.

They are but they are not the big player they once were.   They recently sold their legacy book to Phoenix. Previously they pulled out of the platform market and have turned their back mostly on the intermediary market/individual market to focus on workplace.

JohnWinder

dunstonh said:

Thanks Dunston. I think I need to see which IFAs will give me a quote for a lifetime annuity and their fee so I can compare it with what the online annuity brokers tell me? I wonder if they charge for that though? I mean just to quote?

IFAs will tell you their fees.  Some will be greedy. Some will not be.   

I don't pay say HL just for a quote only if I go ahead? Could that be the same with an IFA? 

If you ask an IFA to do it on an execution basis and ask for a quote, some will do it.  Some may not be interested.

If you have a particular requirement of an advisor it might be easier to find such a beast through this service https://www.evidenceinvestor.com/find-an-adviser/

And indicate you're after an independent advisor if that's what you want.

epsilon4900

poseidon1 said:

epsilon4900 said:

poseidon1 said:

dunstonh said:

Sorry to hijack but can you explain this bit to me please?

A lot of people buying fixed term annuities do so on the basis of buying another one each time they hit the maturity point.   So, at each rollover point, they get the terms on offer at that time.   The annuity rates could be higher at that time or they could be lower.  That is unknown.   

Higher annuity rates at that time, would work in their favour.    As could a decline in their health which qualifies them for an enhanced annuity rate.     In those scenarios, a fixed-term annuity could work out more favourably.

However, if annuity rates are lower and they don't qualify for enhanced annuity rates, then the new terms would not be as attractive.    In that scenario, a lifetime annuity could work out more favourably.

There is also some provider risk here.  There are very few providers that offer fixed-term annuities.   None of the providers give you confidence for being around for the long term.  Not for payment, that isn't the issue but whether they or the product itself will exist in the future.   i.e. when you get to maturity, will you even be able to buy another fixed-term annuity?

Legal & General appears to be a fixed term annuity provider.

No idea how competitive their terms are in what is apparently a small market, but if I were in the market for such a product and chose them I would have full confidence in their being around at the end of the term.

 Of course the business model for fixed term annuities may change radically in the interim, so no guarantee that they would be able to offer a similar product at maturity , but no doubt in the OP's circumstances later down the line, a lifetime annuity might make more sense anyway ( subject to reasonable rates at the time).

I think what I would be more concerned about, if l were in the market for any kind of annuity is the increasing  pace of consolidation in the UK  Life & Pensions insurance industry, which is having a detrimental affect on consumer choice.

As more and more firms merge, close or mopped up by bigger competitors (without new participants entering the market place), not difficult to see an increasingly  non competive oligopoly begin to emerge. Most consumers would be blissfully unaware that this is occurring, or how it might affect the kind of deals available to them going forward.

poseidon1 said:

dunstonh said:

Sorry to hijack but can you explain this bit to me please?

A lot of people buying fixed term annuities do so on the basis of buying another one each time they hit the maturity point.   So, at each rollover point, they get the terms on offer at that time.   The annuity rates could be higher at that time or they could be lower.  That is unknown.   

Higher annuity rates at that time, would work in their favour.    As could a decline in their health which qualifies them for an enhanced annuity rate.     In those scenarios, a fixed-term annuity could work out more favourably.

However, if annuity rates are lower and they don't qualify for enhanced annuity rates, then the new terms would not be as attractive.    In that scenario, a lifetime annuity could work out more favourably.

There is also some provider risk here.  There are very few providers that offer fixed-term annuities.   None of the providers give you confidence for being around for the long term.  Not for payment, that isn't the issue but whether they or the product itself will exist in the future.   i.e. when you get to maturity, will you even be able to buy another fixed-term annuity?

Legal & General appears to be a fixed term annuity provider.

No idea how competitive their terms are in what is apparently a small market, but if I were in the market for such a product and chose them I would have full confidence in their being around at the end of the term.

 Of course the business model for fixed term annuities may change radically in the interim, so no guarantee that they would be able to offer a similar product at maturity , but no doubt in the OP's circumstances later down the line, a lifetime annuity might make more sense anyway ( subject to reasonable rates at the time).

I think what I would be more concerned about, if l were in the market for any kind of annuity is the increasing  pace of consolidation in the UK  Life & Pensions insurance industry, which is having a detrimental affect on consumer choice.

As more and more firms merge, close or mopped up by bigger competitors (without new participants entering the market place), not difficult to see an increasingly  non competive oligopoly begin to emerge. Most consumers would be blissfully unaware that this is occurring, or how it might affect the kind of deals available to them going forward.

I seem to recall that Legal and General did not want to deal with me directly they kept pushing me towards their comparison brokerage  ANNUITY READY? Trouble is that irrespective of which company of the 6 or so came top not all of them will deal with a punter like myself directly. It felt a bit messy really. 

That's curious. See below link to L & G's annuity quote tool. Once you get a quote they then invite you to talk to one of their own in house advisers as well talk to other providers for comparison quotes!

Seems to be a pretty soft sell if you ask me.

https://www.legalandgeneral.com/retirement/pension-annuity/pension-annuity-calculator/

Just used this calculator and it gives rubbish quotes. The lifetime annuity option comes in at £2400 when I have seen on annuity broker websites it come in at £2900. So I am clear that I wouldn't go near L and G on that basis.

dunstonh

JohnWinder said:

dunstonh said:

Thanks Dunston. I think I need to see which IFAs will give me a quote for a lifetime annuity and their fee so I can compare it with what the online annuity brokers tell me? I wonder if they charge for that though? I mean just to quote?

IFAs will tell you their fees.  Some will be greedy. Some will not be.   

I don't pay say HL just for a quote only if I go ahead? Could that be the same with an IFA? 

If you ask an IFA to do it on an execution basis and ask for a quote, some will do it.  Some may not be interested.

If you have a particular requirement of an advisor it might be easier to find such a beast through this service https://www.evidenceinvestor.com/find-an-adviser/

And indicate you're after an independent advisor if that's what you want.

!!!!!!, you are posting that rubbish again?

epsilon4900, you should ignore that link.  JW is not a UK poster and seems to like promoting that site despite being told by multiple posters that its not a proper directory but a commercial site aimed at selling unregulated services.

LHW99

The other probably positive to an IFA, is that if you have any health issues (smoker, overweight, heart conditions etc) they can sometimes get a vbetter quote for you as they know how to fill in the forms to provide the information in a way that the companies will take notice of (AFAIK)