Should I take drawdown or Annuity

DRS1

dunstonh said:

 I have a combined pension pot at the moment of £169000. I have lost £6000 in the last two weeks with the state of the current market.

Which is an irrelevant drop and not even worth taking about really.

If you go for drawdown over a period of 20 - 30 years it may not be that relevant.  But if you are thinking of buying an annuity in July (4 months away) it becomes very relevant.  Will the investments recover in 4 months?

Marcon

thegalfridref said:

I am 65 in July and am going on a three day week until my state pension kicks in in Nov 2026. I have a combined pension pot at the moment of £169000. I have lost £6000 in the last two weeks with the state of the current market. I know everyone is losing at the moment. 
I saw my financial advisor last week to organise drawdown from my pension, to top up my wage when I go on reduced hours. He showed a bit of concern that my money would slowly run out in when I stop earning. Roughly my money would run out in my mid 80s.
 We talked about me taking an annuity, we're he was getting me a 6.6% rate, which would give me £23000 tax free and a lifetime income of £9600. Also if anything happened to me in the first 10 years, 100% would go to my wife. After that it would be 66%.
I am tempted, as I am also worried that my pot won't last, especially with what is happening at the moment. This would also stop me worrying and give me peace of mind for the rest of my life.
I , along with my wife go back to see him next Friday.
Any advice would be grateful.
Thank you

Sometimes the best 'advice' you can give is to suggest the poster reads their own post. You've already answered your own question - and 'endorsements' from total strangers who know nothing at all about you, your spending habits or your other potential sources of finance are frankly meaningless. Listen to yourself (and your wife!) - you are best placed to take your own decision and I think you've done so. Peace of mind can only become more important as you get older...

westv

OldScientist said:

westv said:

OldScientist said:

https://www.williamburrows.com/calculators/annuity-tables/ have slightly more varieties than the HL tables.

Just a pity some options just produce a blank page.

True, although as far as I can tell only the 'no guarantee' when used with a joint life and a 5%pa escalation produce a blank page.

.

Just realised that it's all option when you pick "no guarantee" with a joint life rate as the ng is "single life only".

hotncold47

One other thing I had not realised about RPI linked annuities is that if RPI goes down then so does your annuity.  Not something to put you off because how often does that happen?  Once in the last 20 years I think.

Recently while getting annuity quotes RPI I was informed which providers would not go down if RPI went negative.

Checked my recent quotes on HL yesterday and this morning, the yearly amount is pretty much the same as the last week but the HL commission has increased from £1600 to £3349.99? Seems a bit odd.

TheGreenFrog

hotncold47 said:

One other thing I had not realised about RPI linked annuities is that if RPI goes down then so does your annuity.  Not something to put you off because how often does that happen?  Once in the last 20 years I think.

Recently while getting annuity quotes RPI I was informed which providers would not go down if RPI went negative.

Checked my recent quotes on HL yesterday and this morning, the yearly amount is pretty much the same as the last week but the HL commission has increased from £1600 to £3349.99? Seems a bit odd.

Yes, it depends on the annuity terms.  My RPI-linked annuity remains at same pay-out if RPI is negative, but then there is no increase until the negative RPI "balance" is erased by positive RPI in ensuing months/years.  

Cobbler_tone

It is very easy to point out that the ups and downs of the market are 'normal', which of course they are. However, if someone is retiring in the next couple of years it'll be understandable to look at UK and worldwide economic climate, along with the bigger picture and lack a bit of confidence.
Would anyone predict that we are likely to see a sustained boost in growth over the next couple of years all things considered? It certainly focuses the mind when current contributions are being eaten up, although appreciate the vast majority will have no idea and if anything like the people I know, never look at their pension until just before they need it.

Some people also don't to spend retirement thinking/worrying about what their investments are doing. There is a lot to be said for the security of an annuity.....and cash in the bank, in many instances.