Fixed Term Annuity purchase pot holes!

Nick9967

Hi all , have just been reading one or two posts about purchasing an annuity and want to make sure I'm not overlooking anything basic in my plans , knowing that you lot are definitively the fonts of all knowledge thought I might ask just to put my mind at rest:
There are 3 pots involved in the purchase:
All SW
Account A is a "Retirement Account" 
Split into:
1.  "Retirement Planning" - all non crystallised.
2. "Retirement Income" - Crystalised (took some tax free 2 years ago)

Account B is a Workplace/Personal pension - still paying into through work.

The plan is to take all tax free from A1 and B, then what's left from A1, A2 and B use to purchase the fixed term annuity.

Not likely to be via SW, I'll either use a broker of go direct with Canada Life who seem to be ok with me going direct to them.

Is there anything you can see that's obvious in stopping me doing this? 

thanks all for any input 

DRS1

Most people who buy an annuity with their pension pot would buy a lifetime annuity.  Those who buy fixed term annuities do so for a purpose such as covering the period from retirement up to SPA and they don't use their whole pension pot to buy the fixed term annuity.

What will you do for money when the fixed term expires?

Secret2ndAccount

When you purchase an annuity with a pension pot the typical process is that you receive the 25% tax free cash, and 3/4 of the pot is used to buy the annuity. So you might find it easier if you don't take the TFLS first, and wait to receive it as part of the purchase process of the annuity. The reason is that many providers will not deal with an annuity purchase from an already crystallised pot.  If you use the whole crystallised pot to buy an annuity it is allowed, but partial transfers of crystallised pots are complicated at best, so some providers just won't deal with crystallised pots.

Nick9967

DRS1 said:

Most people who buy an annuity with their pension pot would buy a lifetime annuity.  Those who buy fixed term annuities do so for a purpose such as covering the period from retirement up to SPA and they don't use their whole pension pot to buy the fixed term annuity.

What will you do for money when the fixed term expires?

I should have explained , that after expiration of the fixed term annuity  i have sufficient alternative income, I've chosen this route for piece of mind and safety,  and wouldn't receive my required income for the first 20/25 years should I go lifetime - after a couple of years deliberation I settled on fixed term (of course based on annuity rates staying reasonable until the end of 26 which is when t will happen)

SVaz

Unless things have changed very recently,
you can’t go direct to Canada life for their fixed term income product, I was told I had to go through an advisor. 

Nick9967

Secret2ndAccount said:

When you purchase an annuity with a pension pot the typical process is that you receive the 25% tax free cash, and 3/4 of the pot is used to buy the annuity. So you might find it easier if you don't take the TFLS first, and wait to receive it as part of the purchase process of the annuity. The reason is that many providers will not deal with an annuity purchase from an already crystallised pot.  If you use the whole crystallised pot to buy an annuity it is allowed, but partial transfers of crystallised pots are complicated at best, so some providers just won't deal with crystallised pots.

exactly why asked the question , so thanks, is it the case that you believe i wont be able to use Account A part 2 (crystallised already) as part of the purchase then? there must be a way round that isn't there?

Nick9967

SVaz said:

Unless things have changed very recently,
you can’t go direct to Canada life for their fixed term income product, I was told I had to go through an advisor. 

I thought the same , but emailed them , took some time to come back and they seemed happy to quote , which I've ask for , no reply as yet, i would expect them to say "yes we will but not at this time scale contact us 3 months prior" , or something like that? but they seemed happy to dela with me, will let you know how far i get 

Nick9967

SVaz said:

Unless things have changed very recently,
you can’t go direct to Canada life for their fixed term income product, I was told I had to go through an advisor. 

Actually just checked my sanity and found this "You are able to deal directly with Canada Life, we can produce some quotations for you based on the information below" which was part of my conversation with them pre xmas, 

dunstonh

Nick9967 said:

SVaz said:

Unless things have changed very recently,
you can’t go direct to Canada life for their fixed term income product, I was told I had to go through an advisor. 

I thought the same , but emailed them , took some time to come back and they seemed happy to quote , which I've ask for , no reply as yet, i would expect them to say "yes we will but not at this time scale contact us 3 months prior" , or something like that? but they seemed happy to dela with me, will let you know how far i get 

Are they happy for you to apply via them to?    Happy to quote and happy to apply are two different things.

Plus, if they happy to apply, what is their charge for doing do (it would be commission rather than fee and often the providers you can go direct to take a higher commission than what you can get on fee basis).

Nick9967

dunstonh said:

Nick9967 said:

SVaz said:

Unless things have changed very recently,
you can’t go direct to Canada life for their fixed term income product, I was told I had to go through an advisor. 

I thought the same , but emailed them , took some time to come back and they seemed happy to quote , which I've ask for , no reply as yet, i would expect them to say "yes we will but not at this time scale contact us 3 months prior" , or something like that? but they seemed happy to dela with me, will let you know how far i get 

Are they happy for you to apply via them to?    Happy to quote and happy to apply are two different things.

Plus, if they happy to apply, what is their charge for doing do (it would be commission rather than fee and often the providers you can go direct to take a higher commission than what you can get on fee basis).

it's a good point, they seem to be happy to have me apply , but will certainly double check during any conversations i do have, my initial idea was to see how they came out directly for a fixed term in comparison to an annuity broker such as  Retirement Line , i found that IFA's would only look at this if I contracted them to do a full financial /pension review, which I neither require or want to pay for.

dunstonh

Nick9967 said:

dunstonh said:

Nick9967 said:

SVaz said:

Unless things have changed very recently,
you can’t go direct to Canada life for their fixed term income product, I was told I had to go through an advisor. 

I thought the same , but emailed them , took some time to come back and they seemed happy to quote , which I've ask for , no reply as yet, i would expect them to say "yes we will but not at this time scale contact us 3 months prior" , or something like that? but they seemed happy to dela with me, will let you know how far i get 

Are they happy for you to apply via them to?    Happy to quote and happy to apply are two different things.

Plus, if they happy to apply, what is their charge for doing do (it would be commission rather than fee and often the providers you can go direct to take a higher commission than what you can get on fee basis).

it's a good point, they seem to be happy to have me apply , but will certainly double check during any conversations i do have, my initial idea was to see how they came out directly for a fixed term in comparison to an annuity broker such as  Retirement Line , i found that IFA's would only look at this if I contracted them to do a full financial /pension review, which I neither require or want to pay for.

A similar discussion took place last year.      Many IFAs (mainly employee or larger regional or national firms) won't do it as their employer won't let them transact non-advised business.  But smaller "independent" IFAs were more likely to offer execution-only, as they don't have systems and controls in place that have to cater to the lowest common denominator and the increased business risk that comes from having many employees.     It is a business risk choice rather than a regulatory choice.

Whilst you say you don't want to pay for it, this is where you need to find out the commission.  e.g. a commission of £3000 for no advice vs a fee of £2000 for advice (ignoring execution only) should lead to the fee being the better outcome or vice versa if its the other way around.