Considering an annuity with another provider. Is an IFA really needed to do this?

FIREDreamer

grn99 said:

dunstonh said:

PhoneBook said:

I've been exploring annuities using the Hargreaves Lansdown annuity quotation tool. On transferring around £150,000 from my SIPP into an annuity it would see HL be paid a £4,800 commission. Ouch! If I go down the annuity route I'll certainly be looking for a cost-effective way to purchase it. £4,800!!!! What?!?!?

And this is an example where an IFA can be cheaper (as long as they are not greedy - and there will be some of those).   e.g. a £1500- £2,000 fixed fee.

I seem to recall the average initial fee for IFAs is 1.8% (average, of course, meaning some more, some less), but that is £2,700.

Mine has just quoted £3,100, so I'll be arranging direct I think.

Unless you have a pension with that annuity provider I don’t think you can go direct.

FIREDreamer

grn99 said:

And in my HL quote for SW on the 310k, " For arranging this Annuity having taken tax-free cash, Scottish Widows will pay commission of £2,665.01 to your financial adviser, HARGREAVES LANSDOWN ASSET MGMT LTD." 

That’s less than 0.9%.

You might get a better annuity via Hargreaves by running quotes daily until you reach a sweet spot like I did on 30 May and then locking in the rate if rates drop significantly.

grn99

FIREDreamer said:

grn99 said:

dunstonh said:

PhoneBook said:

I've been exploring annuities using the Hargreaves Lansdown annuity quotation tool. On transferring around £150,000 from my SIPP into an annuity it would see HL be paid a £4,800 commission. Ouch! If I go down the annuity route I'll certainly be looking for a cost-effective way to purchase it. £4,800!!!! What?!?!?

And this is an example where an IFA can be cheaper (as long as they are not greedy - and there will be some of those).   e.g. a £1500- £2,000 fixed fee.

I seem to recall the average initial fee for IFAs is 1.8% (average, of course, meaning some more, some less), but that is £2,700.

Mine has just quoted £3,100, so I'll be arranging direct I think.

Unless you have a pension with that annuity provider I don’t think you can go direct.

Agree, but as it happens, it is with SW

DRS1

grn99 said:

FIREDreamer said:

grn99 said:

dunstonh said:

PhoneBook said:

I've been exploring annuities using the Hargreaves Lansdown annuity quotation tool. On transferring around £150,000 from my SIPP into an annuity it would see HL be paid a £4,800 commission. Ouch! If I go down the annuity route I'll certainly be looking for a cost-effective way to purchase it. £4,800!!!! What?!?!?

And this is an example where an IFA can be cheaper (as long as they are not greedy - and there will be some of those).   e.g. a £1500- £2,000 fixed fee.

I seem to recall the average initial fee for IFAs is 1.8% (average, of course, meaning some more, some less), but that is £2,700.

Mine has just quoted £3,100, so I'll be arranging direct I think.

Unless you have a pension with that annuity provider I don’t think you can go direct.

Agree, but as it happens, it is with SW

So why get a quote via HL?  Were you just checking it against a quote you got direct from SW?

Or were you double checking that the SW quote was the best?

grn99

Yes, getting as many quotes before I went for a direct quote. I now know where the better deal lies.

Secret2ndAccount

Use retirement line. They will lower their commission until they come out cheapest

DRS1

Retirement Line® Official Site | UK's Largest Annuity Broker | Retirement Line

About halfway down the page is mention of a £250 voucher if you get a better like for like quote elsewhere.

RogerPensionGuy

This thread has so much great information and just though I would try eeking out any more on this subject without starting a new thread. 

Of lately(the last few years) I was steering away from annuities and PLAs, but they always remain an option.

Looking at annuities now they feel a little more attractive as SIPPs & GIAs have rolled up very nicely and annuity rates are going up, plus I'm getting older and the general quotes I'm seeing now are very plesent reading.

I'm trying to guess if annuity rates are likely to increase, stay level or reduce in this next period, say 3 months to one year and is there any early signs helping me decide.

I guess I'm trying to catch a rising knife or the bubble before it bursts if you see what I mean. 

Do annuity rates change daily, weekly, monthly or can they just move more freely.

Any information or views most welcome. 

Link below for supplementary information that is getting my attention. 

***

https://www.standardlife.co.uk/about/press-releases/annuity-rates-surge#:~:text=id,9.20%

DRS1

RogerPensionGuy said:

This thread has so much great information and just though I would try eeking out any more on this subject without starting a new thread. 

Of lately(the last few years) I was steering away from annuities and PLAs, but they always remain an option.

Looking at annuities now they feel a little more attractive as SIPPs & GIAs have rolled up very nicely and annuity rates are going up, plus I'm getting older and the general quotes I'm seeing now are very plesent reading.

I'm trying to guess if annuity rates are likely to increase, stay level or reduce in this next period, say 3 months to one year and is there any early signs helping me decide.

I guess I'm trying to catch a rising knife or the bubble before it bursts if you see what I mean. 

Do annuity rates change daily, weekly, monthly or can they just move more freely.

Any information or views most welcome. 

Link below for supplementary information that is getting my attention. 

***

https://www.standardlife.co.uk/about/press-releases/annuity-rates-surge#:~:text=id,9.20%

Well it depends on where gilts prices go and no-one can safely predict that.

But why don't you follow @FIREDreamer's lead and get multiple quotes.  I think a quote is guaranteed for 30 days so if in that 30 day window you see the rates tick down (and think they will carry on down - don't ask me how you decide that but maybe watch for a week or two) then you can grab the highest quote which still is in the 30 day window.

RogerPensionGuy

DRS1 said:

RogerPensionGuy said:

This thread has so much great information and just though I would try eeking out any more on this subject without starting a new thread. 

Of lately(the last few years) I was steering away from annuities and PLAs, but they always remain an option.

Looking at annuities now they feel a little more attractive as SIPPs & GIAs have rolled up very nicely and annuity rates are going up, plus I'm getting older and the general quotes I'm seeing now are very plesent reading.

I'm trying to guess if annuity rates are likely to increase, stay level or reduce in this next period, say 3 months to one year and is there any early signs helping me decide.

I guess I'm trying to catch a rising knife or the bubble before it bursts if you see what I mean. 

Do annuity rates change daily, weekly, monthly or can they just move more freely.

Any information or views most welcome. 

Link below for supplementary information that is getting my attention. 

***

https://www.standardlife.co.uk/about/press-releases/annuity-rates-surge#:~:text=id,9.20%

Well it depends on where gilts prices go and no-one can safely predict that.

But why don't you follow @FIREDreamer's lead and get multiple quotes.  I think a quote is guaranteed for 30 days so if in that 30 day window you see the rates tick down (and think they will carry on down - don't ask me how you decide that but maybe watch for a week or two) then you can grab the highest quote which still is in the 30 day window.

Yes indeed FIREDreamer's comment was already in my head and it's a slight way of catching a peek I guess.

I keep reading bond & gilt rates have been eeking up of late, lots of dynamics going on and it sure looks like many governments will keep borrowing more money in this next period and I'm my head guess I'm hoping annuity rates keep going up, it's just trying to catch a sweet spot, I know I could do a few different annuities over a period to get a blend. 

I saw a few IFAs in early 2024 and asked why gross payments to me didn't increase %wise using 200K, 300K & 400K, the IFAs agreed with my view point and indicated if I picked the 400K one they would adjust their commision/charge to ensure buying a larger product got me better value as their work was the same. 

I also wonder if I ask my current SIPP platform providers will they match or beat best annuity I can find.

I must say I'm feeling warmer to an annuity now than last year in my head, I'm liking the data from RPI linked and a value protection % to give it a bit more balance if I was to expire soonest.