Annuity purchase help

Tanyarfr

Hi, I am trying to help my dad purchase an annuity but I am hitting brick walls; his pension pot is with Phoenix Life and is only for £20,000. I understand if the pension pot is below £30,000 it is not a legal requirement to see an IFA, however I am struggling to find a pension provider that I can simply apply direct to as we already know the product we want. Could anyone please confirm if they have managed to buy direct and if so who from? Could anyone also give me an idea of what an IFA would charge for an annuity purchase with the small pension pot my dad has as understandably we don't want to pay a huge fee for a small pension. Thank you in advance. Tanya 

flaneurs_lobster

I had a similar sized pot that I used to buy an annuity. Didn't go direct (that's hard to do) but used Hub Financial Solutions who act as a "broker". They are paid commission for this by the annuity supplier, if/when you decide to go with their suggested product - this commission amount is quantified in the quotation.

Found their service professional and easy to understand. If I had been dealing with a larger pot I would have used an IFA since their expertise would have helped with some of the more detailed parts of the process when applying for an "enhanced" annuity, but for a policy paying ~£140/month I saved both my and their time.

dunstonh

I understand if the pension pot is below £30,000 it is not a legal requirement to see an IFA,

The £30k rule is only if there are safeguarded benefits.   Over £30k with no safeguarded benefits doesnt need an IFA either.

however I am struggling to find a pension provider that I can simply apply direct to as we already know the product we want. 

You can pretty much count the number of annuity providers on one hand.    Some of these will not deal directly with the consumers and require you to use an intermediary.   That can be an IFA or annuity broker.

Could anyone also give me an idea of what an IFA would charge for an annuity purchase with the small pension pot my dad has as understandably we don't want to pay a huge fee for a small pension. 

I would imagine most IFAs wouldn't offer terms on such a small amount as the work/time required would not be viable.  It is also likely that they would advise that an annuity is not worth buying with a pot of that size and that UFPLS (either partial or full depending on situation) would be better.

SmokeysTravels

If you haven’t already use the annuity comparison tool on the MoneyHelper website. The tool will let you add medical details as he may qualify for an enhanced annuity. The contact details for all the providers will be there. Contact them and see if they will deal with you directly. If so they will give you a quote and application form. If they won’t deal with you directly then you will need to use an annuity broker or financial adviser. There will be charges using these. Sadly, you may struggle to find a financial adviser that will deal with that size of pot, as explained above. 

If you want to consider what other options are available consider having a free Pension Wise appointment. You will be able to sit in on the appointment with your father. These appointments are either face to face or telephone. 

I hope this is useful.

xylophone

Has your father had an interview with Pension Wise to explore his options?

He might be better considering transferring the pension to eg Hargreaves Lansdown or the like and drawing down as best suits his requirements.