Buying Annuity

shown73

OH is coming up to 60, and has a small private pension with Standard Life. She has been given a range of estimates based on various scenarios, but basically she has to buy an annuity with her pension pot. She has the option of staying with Standard Life for this, accepting the status quo, as it were, or buying the annuity from somewhere else. We are total amateurs at this, as, I suppose, most of us are, so have no idea what the best course of action would be. There may well be better places for her pot, or perhaps not. I wonder if anyone on here would have an idea/opinion, even in general terms?? My instinct would be, I think, to stick with SL, but that's all it is, gut feeling.
With the changes in pensions, most now being money purchase, I think its called, most people are going to face this decision in years to come.

dunstonh

but basically she has to buy an annuity with her pension pot.

Its one of the options but isnt the only one.

My instinct would be, I think, to stick with SL

SL dont have very good annuity rates so you would be picking what is probably the worst option.

You should look at the open market option unless the fund is under £17,000 and there are no other pensions.

shown73

Thanks, H, I'll have a trawl round and see what I can find. It is over 17000, and there is a state pension, but the two together don't amount to much.

dunstonh

Dont be afraid to get an IFA in. Open market options are a no lose situation for you. If you do it with Standard Life, they will either keep the commission themselves or pay the original adviser that set the pension up. If you try an open market option yourself, the company you put it with will keep the commission for themselves. So, basically its a no cost option using an IFA. It gets even better if you are a smoker or on perscribed medication (typically 2 or more). Plus many of the annuity providers will only transact via an IFA.

ManAtHome

Recent article here http://www.thisismoney.co.uk/retirement/article.html?in_article_id=430199&in_page_id=6 - think you can get free quotes from the Hargreaves Lansdown website, and/or a small amount of cash to an IFA could pay off big time (I as in Independent, not Insurance or Bank...).

shown73

Thanks lads, brilliant. What would we do without this website? My sympathies go to those without the knowledge, or means, to ask these questions. Retirement throws up so many things that the average person has never had to confront, and once you've given up working, which I'm glad to say I haven't, you are left sitting at home wondering what to do, without even workmates to consult. We did have an IFA, who was very good, but, as is the way of things, he got older as well......Now we seem to be dealing with office blocks, condescending young men/women who assume that you are a fossil, etc.

dunstonh

www.unbiased.co.uk Do a postcode search and you will find a list of local IFAs who can do home visits etc.

No need to deal with office blocks and telephone.