Which fund to lock in annuity value

gm0

L&G do have a fund (or several) with a related explicit declared purpose.  
In my scheme called B7V3 in L&G speak. But it is a scheme specific facade fund to something called

"Future World Inflation Linked Annuity Aware Fund"

when you click through

Seems to contain a number of things. IL gilts yes but corporates also.

Not with your barge pole would I.  Too many assumptions that may not match your scenario and duration needs.  

Something simpler beckons.

"The Fund aims to improve potential 
outcomes for investors likely to 
purchase inflation-linked annuities 
by providing a diversified exposure 
to assets that reflect the broad 
characteristics of investments 
underlying a typical inflation-linked 
annuity product, incorporating 
Environmental, Social and Governance 
(“ESG”) considerations as part of the 
investment strategy.
 The Fund cannot provide full protection 
against changes in inflation-linked 
annuity rates for individual members as 
these also depend upon a number of 
other factors (e.g. changes to mortality 
assumptions)"

It may not be available in the specific scheme. Nor matched to your timeframe.
Nor may it work as designed entirely as you hope.

I'd prefer something simpler.  But that's often how I feel about the L&G offer.

OldScientist

MEM62 said:

dawsonrm said:

My wife has a DC pot of about £200k that we eventually want to use to buy a ten year inflation linked fixed term annuity at 58 as a bridge to SP at 68 and she is currently 48.

With a ten-year horizon I would stay invested in equities.  

For a mix of 50/50 UK and US stocks, historically* a UK investor would have seen 10 year rolling annualised real returns of between -4.8% (1st percentile), -0.7% (10th percentile) and 4.1% (25th percentile). In other words there was a chance of between 10% and 25% of doing worse than the 1% to 2% real currently offered by ILG (conversely, there was a chance of between 75% and 90% of doing better). Whether that risk is worth taking to some extent depends on what the income is for (e.g., essential or adaptive  spending) and personal preference.

* I've used the returns, currency exchange and UK inflation from macrohistory.net