Annuity and Part Time Work

RogerPensionGuy

https://forums.moneysavingexpert.com/discussion/comment/82094607#Comment_82094607

A great post and I obviously enjoyed it, thank you.

I'm especially interested in annuity rates and just consider myself lucky with timming and my age, my DC SIPP had rolled up very nicely in this bull market, I was mid 60s now and wanted a hands off vehicle with no risk or worry and an annuity was always in my mind.

I did much research on annuity rates and obviously a point where I pulled the plug, May2026 in my case.

I used 75% of my DC SIPP then and looking hoping rates will eek up a bit more and enough to entice me to empty DC SIPP and be done with it.

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Questions. Did you do a one off annuity in 2024 or may do more in the future?

Did you use an IFA or a Broker for the annuity?

Did the organisation that did your annuity say rates had probably peaked or were in the peak zone and 2024 was a sensible time to pull that plug?

I'm very cautious(people call me tight) and I'm trying to pick(silly I know) the bestest time to empty my DC SIPP via my 2nd and last annuity and eek out obviously best value for me.

I'm thankfully(luckily) a 40% tax payer now and I plan/guessing it will become 42% or 43% at some point in the future for me as so much pressure to tax old people more, time will tell.

So being careful & reluctantly in my head, I'm trying to optermise my best net income results.

If rates were to slide or drop down before I pull the plug, I then May just keep the DC SIPP open with very passive units and just drawdown at 2% to 3% and if markets drop, just switch it off until a recovery as this income is just over & above my needs, drawdown isn't my preference, but guess I could live with it.

Any views welcome, not just DRS1.

TIA and cheers Roger.

DRS1

Did you do a one off annuity in 2024 or may do more in the future?

I bought one annuity in 2024 and another in 2025. That is it - no more pensions left.

Did you use an IFA or a Broker for the annuity?

In 2024 I used Retirement Line - so a broker. I had used their annuity quoter tool online and that resulted in a call from someone there. I think that talk included talk about a spike in annuity rates courtesy of Liz Truss and how they had fallen back. I did nothing then (I don't really like getting calls like that). Months later when I started the process I tried to do it myself but Standard Life and Scottish Widows who came top of my list of quotes then would not deal with someone off the street so I went back to Retirement Line.

Did the organisation that did your annuity say rates had probably peaked or were in the peak zone and 2024 was a sensible time to pull that plug?

When I went back to Retirement Line I didn't ask if rates had peaked. I think they were getting better than when I checked months before and they got better still during the process (which took from April till the end of August ). Anyway I doubt Retirement Line would do anything to stop you buying an annuity whenever you want. An IFA might be a different story. And I was not really interested in drawdown as an alternative to buying an annuity. I would not trust myself to invest the pension appropriately and there is no-one to leave it to when I die so annuities made sense to me.

ali_bear

This does seem like a good time to be converting a pension fund held in stocks and shares into an annuity. Possibly in the future we will look back on this time as an ideal opportunity. Or possibly not 🤷‍♂️

RogerPensionGuy

https://forums.moneysavingexpert.com/discussion/comment/82095246#Comment_82095246

Thanks for such good clear information.

Funnily enough Retirement~Line will meet or better any annuity quote, however I in my case just a few months back, the best quote I got was also I felt after research best broker to expedite the process to hopefully avoid getting a reduction due rates slide down a bit, so I went hammer and tongs responding to any communications instantly or within hours and it took IIRC 9 or 10 weeks from advisor consultation inside the brokers until my funds landed in the annuity provider to seal a deal.

I got another quote at about 6 weeks in to the process and new quote was just a few pennies below initial quote and funds landed in time to capture that 2nd quote.

Then luckily they requoted on funds arrival as per the process, they then use best quote for customer, I was so lucky it popped up a 100 times the about the 2nd quote was, so I felt lucky, in hindsight, it would of been okay or purfect to of used the full DC SIPP and not just 75% of that pot.

For information, data suggests time to do what I did is 11 to 14 weeks approximately, I expect it will get slower if annuity rates stay at these levels or get highter and next April DC SIPP IHT changes.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82095440#Comment_82095440

Ah yes I had forgotten that bit - you get a quote which lasts for a period (30 days I think) but Retirement Line get a new quote at least once in the process to extend the 30 days. There was some hiccup with my one which meant they were able to get the quote's validity extended to the end of August and I had a tense wait to see if all the payments arrived in time. I think the last one arrived a day before the quote expired.

RogerPensionGuy

https://forums.moneysavingexpert.com/discussion/comment/82095452#Comment_82095452

Also to mention, I had removed TFLS from DC SIPP before last budget that I didn't need just in cash rules got changed.

So a little quirk was my funds to insurance company was from crystallised and uncrystallised funds and it made it a little bit clunky, my DC SIPP provider actually made two payments on the same day which obviously totalled X £s as was the plan.

To also add, when I swept out TFLS, DC SIPP company wanted to sweep all DC SIPP pot in to crystallised bucket, I said no thanks just in case TFLS goes up, they did agree that was prudent with only upside possible.

Maybe I'll be lucky and TFLS will edge up in October budget and I'll sweep out more TFLS, I won't hold my breath, however Hunt did abolished the LTA and the horrible 25% tax surcharge I was planning to pay, I can remember with 100% clarity when Hunt ripped up the LTA, I was hoping for 1.1M or 1.2M and bang it was gone, an amazingly lucky for careful(tight) me.

mrklaw

would like to be able to buy one in advance. You can have my money now but won’t retire for 2.5 years.

hotncold47

Rates seem to have gone up slightly in the last few days on Moneyhelper and HL on the amount I'm looking at using. Still trying to decided on Flat or RPI . As I'm 73 and already have SP and RPI Annuity in place the greater amount is tempting me for my GO period. Retirementline were exactly the same quote as MH and HL the last time I was in touch with them.

DRS1

Maybe I'll be lucky and TFLS will edge up in October budget and I'll sweep out more TFLS, I won't hold my breath, however Hunt did abolished the LTA and the horrible 25% tax surcharge I was planning to pay, I can remember with 100% clarity when Hunt ripped up the LTA, I was hoping for 1.1M or 1.2M and bang it was gone, an amazingly lucky for careful(tight) me.

I know we should be grateful the LTA was abolished when it was but a bit of me can't help thinking about what I would have done differently if I had known it was going to be abolished.

bigbazza23

the information regarding annuities is very helpful.

I have spent a good few hours checking money helper. Does anyone have experience of using an IFA, going direct or using a specialist provider.

My research tends to lean towards IFA for health issues but specialist if not a complex purchase.

I have not had any dealings with these companies yet so would appreciate any further comments.