Updated Annuity Questin

Options
choi
choi Posts: 155 Forumite
First Anniversary First Post Combo Breaker
in Pensions, annuities & retirement planning
I want to find out the best option to use my pension pot of £250 k
I want to find out what is the best option for my wife and I
I am 66 this year
My wife will be 60

its looking like the following are the best options

Single Life Convential
30 year Guarante
3% escalation
£7400 pa

Single Life Conventional
100% protect
3% escalation
£8500 pa

I have been offered Fixed Term Annuities

What are your thoughts on these

I am just looking to achieve an annual income of circa £8 k pa
Plus
Ensure my wife receives payments until she is at least 90
«1

Comments

  • Brynsam
    Brynsam Posts: 3,643 Forumite
    First Anniversary Name Dropper Combo Breaker First Post
    edited 10 March 2018 at 1:43AM
    Options
    Any health issues for either of you?

    Single life is just that - pays out for your life only with no benefits for your wife if she survives you.

    Why do you want a 30 year guarantee period and why fixed term? If you are using money from a registered pension scheme, any annuity you buy must be payable for the remainder of your lifetime.

    A £250,000 pot won't buy you £8K a year with a spouse's pension. See https://www.hl.co.uk/pensions/annuities/annuity-best-buy-rates for examples.

    This will help: https://www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/guides/annuities/buying-an-annuity
  • dunstonh
    dunstonh Posts: 116,548 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Options
    I have been offered Fixed Term Annuities

    Who is offering you these?
    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.
  • sandsy
    sandsy Posts: 1,720 Forumite
    Name Dropper First Anniversary First Post
    Options
    Fixed term annuities are effectively written as drawdown contracts. You choose a level of income and how long it is payable, then a maturity value may be available at the end of the fixed term.

    I think LV, L&G and Canada Life offer them but normally only through advisers?
  • xylophone
    xylophone Posts: 44,556 Forumite
    Name Dropper First Anniversary First Post
    Options
    You said in earlier posts that you were consulting an IFA.

    Did you explain that you wanted an annuity that would continue to pay out income to your wife in widowhood?

    If so, I cannot see why he suggested a single life annuity .

    You say in an earlier post that your wife is expecting a state pension and a teacher's pension.

    Has she obtained a state pension forecast?

    https://www.gov.uk/check-state-pension

    You are already in receipt of a state pension?
  • choi
    choi Posts: 155 Forumite
    First Anniversary First Post Combo Breaker
    Options
    dunstonh wrote: »
    Who is offering you these?

    Retirement Line
    Canada Life
  • choi
    choi Posts: 155 Forumite
    First Anniversary First Post Combo Breaker
    Options
    xylophone wrote: »
    You said in earlier posts that you were consulting an IFA.

    Did you explain that you wanted an annuity that would continue to pay out income to your wife in widowhood?

    If so, I cannot see why he suggested a single life annuity .

    You say in an earlier post that your wife is expecting a state pension and a teacher's pension.

    Has she obtained a state pension forecast?

    https://www.gov.uk/check-state-pension

    You are already in receipt of a state pension?

    I am seeing the IFA this week

    The above query is based on a quote from Retirement Line
    I assumed single life with protection or guarantee was best option to provide a pension for my wife should I die first

    My wife will get £8k state pension and circa £6k teachers pension
  • dunstonh
    dunstonh Posts: 116,548 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Options
    choi wrote: »
    Retirement Line
    Canada Life

    Sorry, what I meant is, who has told you these fit your objectives? Is it an IFA or is through reading about them?

    These are valid options but they fit a certain minority So, was just wondering how they got in front of you.
    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.
  • Linton
    Linton Posts: 17,221 Forumite
    Name Dropper First Post First Anniversary Hung up my suit!
    Options
    I suggest you dont pre-empt your IFA in deciding which pension is best for your needs - that is his job. In choosing some of your options you may be paying for a benefit that you may not want eg a pension going to your estate after both you and your wife have died.

    What you and your wife should do before the discussion with the IFA is to think through what minimum benefit will be needed should you die first. You will need to take into consideration the greater the benefit for your wife after you have gone the less income you will get whilst you are still alive.
  • choi
    choi Posts: 155 Forumite
    First Anniversary First Post Combo Breaker
    Options
    dunstonh wrote: »
    Sorry, what I meant is, who has told you these fit your objectives? Is it an IFA or is through reading about them?

    These are valid options but they fit a certain minority So, was just wondering how they got in front of you.

    A year ago I contacted Retirement Line for Annuity Advice

    He said he would get back in a years time
    Voila

    Im thinking about this option for peace of mind

    Single Annuity
    30 Year Guarantee period
    3% Escalation

    That would provide a sum of £7440 per month escalated
    For my wife or I for 30 years

    Cost £250,000
    Guaranteed Return £231450

    Thats peace of mind
    Cost no worse than £18550
  • Linton
    Linton Posts: 17,221 Forumite
    Name Dropper First Post First Anniversary Hung up my suit!
    Options
    £7440 per year!

    You are guaranteeing until you are both in your 90's? Have you checked whether it would be cheaper to go for a joint annuity when the pension company can stop paying when you both die which may be before either of you are 90.

    The guarantee runs out when Mrs is 90. She may well live longer than that - according to ONS data her chances of doing so are a bit more than 50/50. Another reason to go for a joint annuity rather than relying on guarantees.

    It may be better to drawdown for the first 5-10 years or more and then take out an annuity.

    There are lots of other variations which may be worth considering. The IFA can come up with something designed to your circumstances.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.6K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.9K Spending & Discounts
  • 235.7K Work, Benefits & Business
  • 608.7K Mortgages, Homes & Bills
  • 173.3K Life & Family
  • 248.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards