Pension annuity rates

GDB2222

An easy question, hopefully!

Where do I look up indicative annuity rates to get an idea whether it's worth transferring my DB pension into an index-linked annuity, rather than drawing it direct from the scheme?

I think it's unlikely to work, but I'd just like to check.

westv

Are you allowing for £Ks it would cost you to transfer?

Albermarle

GDB2222 said:

An easy question, hopefully!

Where do I look up indicative annuity rates to get an idea whether it's worth transferring my DB pension into an index-linked annuity, rather than drawing it direct from the scheme?

I think it's unlikely to work, but I'd just like to check.

A DB pension is effectively an annuity so what is the point. Plus it is a difficult and expensive thing to do, if possible at all. 
I have a feeling you have asked this question before ?

MarkCarnage

Why would you consider paying for advice (which will almost certainly say it's a bad idea), to do more or less exactly what your DB pension is likely to do anyway? The like for like comparison will probably show that your DB is better as you are not paying transaction and advisory costs, nor for the annuity provider's profit margin. 

QrizB

GDB2222 said:

Where do I look up indicative annuity rates to get an idea whether it's worth transferring my DB pension into an index-linked annuity, rather than drawing it direct from the scheme?

You can get an indication here:

https://www.hl.co.uk/retirement/annuities/best-buy-rates

If you want a bespoke quote you'll need to fill in the questionnaire and see what pops out.

MarkCarnage said:

Why would you consider paying for advice (which will almost certainly say it's a bad idea), to do more or less exactly what your DB pension is likely to do anyway?

I guess if OP's a smoker or gets some other sort of reduced-life-expectancy increase to their annuity rate, it might possibly be worth it? Or if their DB pension has a 2.5% RPI cap and they fancy an uncapped annuity?

It would be interesting to see how their CETV stacks up.

GDB2222

One reason for considering an annuity is that I can choose a 100% widow’s pension, which the DB scheme doesn’t offer. I think my wife will probably outlive me by many years, so that’s an important consideration. 

I have had a quote from L&G for an annuity at 71% of the DB pension. What I’d like to gauge at this stage, without employing an IFA, is whether L&G are competitive or not. It would give me an idea of whether that 71% can be pushed up a bit. 

I’m aware that IFAs charge quite heavily for providing advice in these cases, by the way. 

DRS1

When I got annuity quotes L&G came fourth (out of six).

HL have a comparison tool for annuity quotes and so do other sites (eg Moneyhelper.org) so you can get your own "quotes" and see how they compare.

But this really is not a good use of your time.

DullGreyGuy

GDB2222 said:

I have had a quote from L&G for an annuity at 71% of the DB pension. What I’d like to gauge at this stage, without employing an IFA, is whether L&G are competitive or not. It would give me an idea of whether that 71% can be pushed up a bit. 

Each insurer has its own longevity assumptions and methods of segmenting customers across their different patterns. If one insurer was universally cheaper it's likely there would only be one insurer. 

GDB2222

That’s been very helpful, thanks. I got some quotes from Moneyhelper, and it turns out that L&G are competitive for RPI linked annuities at the moment. 

Bostonerimus1

I think you're going to end up paying a lot of money to buy that lifetime income for your spouse. Using a DB pension CETV to buy an annuity is not what I would do. 

First double and triple check the terms of your DB pension!
Then consider doing drawdown
You might also just want to buy life insurance to provide for any spouse that survives.

GDB2222

The DB scheme offers an option to give up some of my pension to enhance the widow's pension. So, I'm going to explore that option. 

Waiting for a retirement pack, which is expected to take a while.