Help with picking an annuity

Albermarle

greenery said:

Aretnap said:

greenery said:

DRS1 said:

greenery said:

dunstonh said:

I have £80K in a pension pot and I have an additional £100K 

Will you be paying the £100k in to the pension or will it remain external to the pension (it needs a different annuity type if external).

Thanks. 
That was another query I had. Would it be better to pay the £100K into my pension pot. That was what I had intended to do.

I have no idea where to look for an IFA, I don't know anyone who can recommend one.- I guess a local google search?

What sort of fee would an IFA charge for this?

Are you sure you CAN pay £100k into your pension pot?  There are limits.

No, I am really not sure. The £100K is from a house sale which I always intended to use for my pension and combining it seems the obvious thing to do but I've not looked into it yet. 

The maximum you can pay into a pension each year and claim tax relief is equal to 80% of your income from employment for the year. 80% of your salary basically, or 80% of your profits if you are self-employed.

Income from employment also includes things like bonuses, but not things like rental income, pensions or money from house sales.

(I believe it's possible in theory to pay in more than you can claim tax relief on, but it's rarely something that you would want to do because it's the tax relief that makes a pension desirable in most cases. There are also not many pension providers who will accept contributions over the tax relief limit.)

So are you still working and how much do you earn? That will determine whether you can pay it into your pension (within any reasonable length of time at least).

Thanks

I am not working. I have the state pension and another DB pension. 
My plan was to use the £100K with the £80K in my pension pot to just but one annuity to simplify things, but it looks like I may have to get professional advice as to what I can do with the £100K.
The £100K is from a house sale that was a rental, so I am no longer getting the rental income

Buying an annuity with a pension pot is the 'normal' way'. You get 25% of the pot as a tax free lump sum and the rest buys the annuity. The income from it is taxable.

Buying an annuity with non pension money is more of a niche activity and with less providers.

You can not combine them as the tax treatment is different.

RogerPensionGuy

Below is a link explaining PLAs (Purchased Life Annuities) for information.

I did lots of research on them last year and found them interesting and am still considering one or more of them. 

I requested a few quotes and used 100K, 200K & 300K as the input amount, I was surprised that the the 300K didn't give a bigger return pro-rata against the 100K or 200K, the IFA agreed and said if I did the 300K, he could & would increase the income maybe a little via commission he was getting from the insurance companies IIRC, when I looked last year IIRC Canada Life was always 95% the best return offerings.

I liked the mechanics of how they pay out and only X % of the income was potentially taxable, it was friendly I though, I also liked that as I have sufficient DB & DC pension schemes I could buy the PLA in my partners name as they have tiny pensions and buying in their name will be more tax efficient I think. 

***

https://www.litrg.org.uk/savings-property/tax-savings-and-investments/purchased-life-annuities#:~:text=Purchased life annuities are financial,be for a shorter term.