Finding an annuity

af1963

"potential to tip into" sounds like it's a marginal case, so you could calculate in reverse from the max amount that you can add to current income sources, and work out how much to spend on an annuity to generate that amount.

Still some uncertainty if you have income that rises with RPI or similar, while allowances are frozen.  But you could allow a few percent of safety margin to cover that for as many years as you think makes sense.

If buying an annuity tips you into 40% tax even though the income is spread over many years, then taking it out any other way is also likely to end up with some of it taxed at 40%.

FIREDreamer

af1963 said:

"potential to tip into" sounds like it's a marginal case, so you could calculate in reverse from the max amount that you can add to current income sources, and work out how much to spend on an annuity to generate that amount.

Still some uncertainty if you have income that rises with RPI or similar, while allowances are frozen.  But you could allow a few percent of safety margin to cover that for as many years as you think makes sense.

If buying an annuity tips you into 40% tax even though the income is spread over many years, then taking it out any other way is also likely to end up with some of it taxed at 40%.

… and if left unspent, potentially 40% inheritance tax plus recipient income tax on top. 

Hence I spent the lot on annuities for a guaranteed lifetime income (and guarantee period / spouse) and any excess unspent can be paid into a pension (£3,600 gross max) or ISA.

Time4T_Accounts

Yes, very marginal - and very unlikely to last for more than a year or two.  I don’t think there’s a right answer here (given the ‘unknown’ future, I doubt there is one). But it strikes me that decisions in this decumulation stage of life (I’m 67) are more open to revision than the ‘fire and forget’ of accumulation.

ukdw

ukdw said:

It is very quick and easy to get online quotes from HL - including enhanced.  

I've used regular quotes from HL to try and time the market, and sense check the quotes from my IFA - the IFA ones are slightly better than HL - but took weeks to get, instead of seconds.

I'm not completely sure about charges are in the HL quotes.  My IFA charged the equivalent of roughly 0.75% for my two Annuity purchases

Update - finally got IFA annuity quotes after nearly 2 months (due to Underwriter medical referral).

End result is IFA charge 1% vs HL commission rate 1.8% - 

IFA Annuity rate (before charge)  (1/12) 6.38% vs HL Annuity Rate (27/11) 6.4% (for Single, Level, 30yr)

Overall it worked out after charges/commission IFA rate 6.32%, vs HL rate 6.29% - so a slight 0.03% saving - so have gone ahead with 3rd and probably final annuity purchase.

Bad news though is that during the 2 month period overall rates down 0.22% - from HL rate of 6.51% back in October (3/10). 

Not sure how difficult it would be to actually purchase from HL or another direct broker  - but it does seem it has some merits if you are trying to time the market for the best possible rate.