Buying an annuity for cash

Albermarle

timbrass said:

saneman39 said:

Can anyone tell me if there is a company from whom I can buy an annuity for cash as I don't have a 'pension pot' that I can convert (I'm over retirement age). I would be looking to spend £100K from cash savings. An annuity would fit me perfectly. I don't need a financial adviser because I have done and understood all the research. I have approached several such, not very helpful, annuity providers who will only entertain the 'pension pot' approach. If you can help I would appreciate a heads up. Many thanks.

Apparently (according to Pensionwise) there are only 2 providers in the Purchased Annuity market (different from Pension Annuity!) Aviva and Canada Life.  Apparently only Aviva offer competition rates. You get a higher return on a Purchased Annuity because the tax is deemed to already have been paid - i.e most of what Aviva is doing is giving you your own (taxed) money back. 

If you take tax out of the equation, the annuity rates for purchased life annuities are usually lower than pension ones.
This seems to be due to the lack of competition due to the very low demand.

FIREDreamer

Albermarle said:

timbrass said:

saneman39 said:

Can anyone tell me if there is a company from whom I can buy an annuity for cash as I don't have a 'pension pot' that I can convert (I'm over retirement age). I would be looking to spend £100K from cash savings. An annuity would fit me perfectly. I don't need a financial adviser because I have done and understood all the research. I have approached several such, not very helpful, annuity providers who will only entertain the 'pension pot' approach. If you can help I would appreciate a heads up. Many thanks.

Apparently (according to Pensionwise) there are only 2 providers in the Purchased Annuity market (different from Pension Annuity!) Aviva and Canada Life.  Apparently only Aviva offer competition rates. You get a higher return on a Purchased Annuity because the tax is deemed to already have been paid - i.e most of what Aviva is doing is giving you your own (taxed) money back. 

If you take tax out of the equation, the annuity rates for purchased life annuities are usually lower than pension ones.
This seems to be due to the lack of competition due to the very low demand.

Also there is a degree of mortality selection for purchase life annuities.

saneman39

timbrass said:

saneman39 said:

Can anyone tell me if there is a company from whom I can buy an annuity for cash as I don't have a 'pension pot' that I can convert (I'm over retirement age). I would be looking to spend £100K from cash savings. An annuity would fit me perfectly. I don't need a financial adviser because I have done and understood all the research. I have approached several such, not very helpful, annuity providers who will only entertain the 'pension pot' approach. If you can help I would appreciate a heads up. Many thanks.

Apparently (according to Pensionwise) there are only 2 providers in the Purchased Annuity market (different from Pension Annuity!) Aviva and Canada Life.  Apparently only Aviva offer competition rates. You get a higher return on a Purchased Annuity because the tax is deemed to already have been paid - i.e most of what Aviva is doing is giving you your own (taxed) money back. 

You are right but unfortunately, both these companies will not deal with individuals, only Financial Advisers. The websites are very anti-retail purchasers and like I said, given the relatively small size of my savings and my existing knowledge and experience, I don't need to pay for advice. Thanks anyway.

QrizB

saneman39 said:

... given the relatively small size of my savings and my existing knowledge and experience, I don't need to pay for advice.

You started this thread with a desire to buy a PLA. If PLAs are only available via intermediaries, your choice appears to be to go via an intermediary or not buy a PLA.

saneman39

QrizB said:

saneman39 said:

... given the relatively small size of my savings and my existing knowledge and experience, I don't need to pay for advice.

You started this thread with a desire to buy a PLA. If PLAs are only available via intermediaries, your choice appears to be to go via an intermediary or not buy a PLA.

The third alternatively of course, is to ask my original question.

dunstonh

saneman39 said:

timbrass said:

saneman39 said:

Can anyone tell me if there is a company from whom I can buy an annuity for cash as I don't have a 'pension pot' that I can convert (I'm over retirement age). I would be looking to spend £100K from cash savings. An annuity would fit me perfectly. I don't need a financial adviser because I have done and understood all the research. I have approached several such, not very helpful, annuity providers who will only entertain the 'pension pot' approach. If you can help I would appreciate a heads up. Many thanks.

Apparently (according to Pensionwise) there are only 2 providers in the Purchased Annuity market (different from Pension Annuity!) Aviva and Canada Life.  Apparently only Aviva offer competition rates. You get a higher return on a Purchased Annuity because the tax is deemed to already have been paid - i.e most of what Aviva is doing is giving you your own (taxed) money back. 

You are right but unfortunately, both these companies will not deal with individuals, only Financial Advisers. The websites are very anti-retail purchasers and like I said, given the relatively small size of my savings and my existing knowledge and experience, I don't need to pay for advice. Thanks anyway.

That isn't necessarily a bad thing.  For example, with lifetime annuities, the direct to consumer offerings often factor in more commission than an adviser fee.    So, whilst you may not need advice, it can be cheaper (and therefore higher annuity rate) than the non-advised method.

af1963

saneman39 said:

Bostonerimus1 said:

saneman39 said:

Can anyone tell me if there is a company from whom I can buy an annuity for cash as I don't have a 'pension pot' that I can convert (I'm over retirement age). I would be looking to spend £100K from cash savings. An annuity would fit me perfectly. I don't need a financial adviser because I have done and understood all the research. I have approached several such, not very helpful, annuity providers who will only entertain the 'pension pot' approach. If you can help I would appreciate a heads up. Many thanks.

It's an unconventional request so why don't you just set up a ladder of saving bonds and gilts/bonds or various terms ie just create your own annuity? Or look into investing the money in a portfolio of equities and bonds and taking income on a total return basis.

Thanks for your response, but I am set on the simplicity and certainty of an annuity. Fiddling with bond ladders and the risk associated with sequence of returns is not for me.

I don't think SOR risk is relevant with a bond ladder.  You know up front exactly what payments you'll be receiving and when.