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Fixed term annuity vs Drawdown
Comments
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Who's the annuity provider please?
Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0 -
Standard life but Canada Life is also around that figure
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When I contacted an IFA about another matter they were very keen to sell me a fixed term annuity 🤔
Have you considered a life annuity with RPI linkage and a guarantee period or spousal benefit that suits your needs? Maybe worth getting a quote (via HL? website) for comparison.
🐻 A little FIRE lights the cigar1 -
this product continues to pay out to dependants for the full 25 year term (unlike the standard/basic annuity).
Not necessarily. Some FTAs will cease on death. Just like some lifetime annuities will cease on death. With both, what matters is the death benefits selected. If both a lifetime annuity and a fixed-term annuity have a 25-year guarantee period, then both will pay out for 25 years as a minimum.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
sounds about right but lack of inflation means a semi gamble on future returns. If you’re older and expenses likely fall over time that might mean a flat rate is acceptable in trade for a higher starting value, but that’s a judgement call. It’s not a direct comparison so not a no brainer IMO
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Yes, it is a product that pays the full 25 years regardless
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Fair comment. The main attraction is the certainty.
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And have you compared it to a lifetime annuity with a 25-year guarantee?
Fixed-term annuities don't take health and lifestyle into account, whereas lifetime annuities do. Obviously, the longer the guarantee period you select (and 30 years is the current maximum), the less any uplift would be.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Good point. I also have health conditions so this is definitely worth exploring first. IFA or Broker??
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Some of the online sites will let you input your health details and provide you with a quote.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1
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