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Help needed with buying an annuity with my personal pension funds

Keith5588
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Keith5588 Advanced Member

Keith5588

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Posted

Hi, I have had help from people in this forum in the past and am very grateful for that.

After spending nearly 8 years in Thailand I have arrived back in the UK 12 days ago to sell my house and sort some financial stuff including my Money Purchase Private Pensions funds.

I have 3 separate funds with different Insurance companies but they are all similar, quite old and I think with profit schemes. Adding all 3 I have a total of about £300,000. I have contact details for all 3.

My original plan was to contact a SIPP provider and move all 3 to this but now I am thinking of buying an annuity as the annuity rates are quite good and I want things to be simple in the future.

So take 25% tax free lump sum and buy an annuity with the rest.

 

My question what is the best way to go about doing this?

Do I need or would it be wise to have an Independent Financial Advisor help me?  If so would they charge me a fee?

Or could I just look on the internet to find the Insurance company offering the best annuity rate, contact them, and they would do all the processing, hopefully for free?

 

Any help much appreciated.  Thanks in advance

Keith

PS I will be 72 next month and am looking forward to spending the rest of my life relaxing in Thailand with minimum financial decisions.

 

Liverpool Lou Star Member

Liverpool Lou

Posted
Posted

An IFA would do the work for you but will not do it free of charge.  If they do not charge you a fee, they will be remunerated with commission by the insurer that they recommend and that commission comes out of your annuity purchase funds.  All the insurers will pay the IFA commission.   If you agree to pay a fee for the work you must ask the IFA to refund any commission he is paid to you.

 

If you go directly to an insurer, there will not be an up-front fee to pay but there will be policy charges that the insurer deducts from the annuity funds.  No professional service providers, be it insurers of IFAs  work for free.

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Liverpool Lou Star Member

Liverpool Lou

Posted
Posted
8 minutes ago, mogandave said:

I do not understand your question. 

 

Are you just asking how to buy an annuity? 

 

That is obviously what he is asking...use an IFA or deal with an insurer,

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Liverpool Lou Star Member

Liverpool Lou

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Posted
16 minutes ago, TedG said:

Why do you want an annuity vs putting the money in the market? 

As the layman that he clearly is, perhaps he wants the peace of mind of a guaranteed income every month for the rest of his life without the risk of market movements.

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TedG Gold Member

TedG

Posted
Posted
1 minute ago, Liverpool Lou said:

As the layman that he clearly is, perhaps he wants the peace of mind of a guaranteed income every month for the rest of his life without the risk of market movements.

I can see that.

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Liverpool Lou Star Member

Liverpool Lou

Posted
Posted
1 minute ago, mogandave said:
8 minutes ago, Liverpool Lou said:

That is obviously what he is asking...use an IFA or deal with an insurer,

In seven paragraphs

That's his prerogative, it's his thread.

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Lacessit Star Member

Lacessit

Posted
Posted

Why wouldn't the OP either buy bank shares for the dividends, or live on the interest from funds on deposit?

 

at 6% interest, that's 780,000 baht pa. More than enough to live on. The capital is preserved.

 

Annuities reduce the risk of outliving one's savings. They also are cream for the insurance companies if one dies early.

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soi3eddie Platinum Member

soi3eddie

Posted
Posted

You need to contact an IFA. Annuities are generally not seen as a good option for many these days. Everyone's circumstances will differ which is why, in my opinion, it is best to get professionally tailored advice. Once in an annuity the money is gone, there are different types of annuity that might help a spouse on your demise. Again, an IFA is the key here.

  

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Patong2021 Platinum Member

Patong2021

Posted
Posted
10 minutes ago, Lacessit said:

Why wouldn't the OP either buy bank shares for the dividends, or live on the interest from funds on deposit?

 

at 6% interest, that's 780,000 baht pa. More than enough to live on. The capital is preserved.

 

Annuities reduce the risk of outliving one's savings. They also are cream for the insurance companies if one dies early.

 I don't see how they are cream for the insurers. The annuity value at death is paid to the estate. unless the owner arranded for the anuity to continue for a spouse's benefit.

Liverpool Lou Star Member

Liverpool Lou

Posted
Posted
7 minutes ago, Patong2021 said:

 I don't see how they are cream for the insurers. The annuity value at death is paid to the estate. unless the owner arranded for the anuity to continue for a spouse's benefit.

Annuities with no death benefit end on the death of the annuitant and so can benefit the insurer. 

Annuities with death benefits payable to beneficiaries result in lower income payments (or higher charges).

Liverpool Lou Star Member

Liverpool Lou

Posted
Posted
4 minutes ago, BangkokReady said:
44 minutes ago, Liverpool Lou said:

That's his prerogative, it's his thread.

 

The broken clock is right again...  🤔

At least my being correct twice a day (but only in your sniping mind) is an improvement on your record.

 

If you're suggesting that my posts are usually inaccurate I'd love to see some examples that support your "statistics".   

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Liverpool Lou Star Member

Liverpool Lou

Posted
Posted
58 minutes ago, Liverpool Lou said:

No professional service providers, be it insurers of IFAs  work for free.

Correction: No professional service providers, be it insurers or IFAs  work for free.

BangkokReady Diamond Member

BangkokReady

Posted
Posted
8 minutes ago, Liverpool Lou said:

At least my being correct twice a day (but only in your sniping mind) is an improvement on your record.

 

If you're suggesting that my posts are usually inaccurate I'd love to see some examples that support your "statistics".   

 

Nope, you've gone again...  🤷‍♂️

Keith5588 Advanced Member

Keith5588

Posted
  • Author
Posted
1 hour ago, Liverpool Lou said:

An IFA would do the work for you but will not do it free of charge.  If they do not charge you a fee, they will be remunerated with commission by the insurer that they recommend and that commission comes out of your annuity purchase funds.  All the insurers will pay the IFA commission.   If you agree to pay a fee for the work you must ask the IFA to refund any commission he is paid to you.

 

If you go directly to an insurer, there will not be an up-front fee to pay but there will be policy charges that the insurer deducts from the annuity funds.  No professional service providers, be it insurers of IFAs  work for free.

Thank you for the clear advice  @Liverpool Lou 

To clarify some other committments.

I have no children, no immediate family at all in the UK.

I have transferred all my cash ISA money into stocks and shares and feel that is enough exposure to the stock market. The only person I want to protect if I die is my Thai gf / partner and I have already made sure that she will be OK.

I started a level annuity when I left work in 2009 giving me £400 per month. It's nice to have a monthly garranteed income with no action needed.

Thanks again.

 

 

 

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Yolando Rookie Member

Yolando

Posted
Posted
10 hours ago, Liverpool Lou said:

As the layman that he clearly is, perhaps he wants the peace of mind of a guaranteed income every month for the rest of his life without the risk of market movements.

Much better to just buy government bonds then.  Much lower risk than an annuity, and none of the fees.  Annuities are terrible investments and many are scams. 

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jas007 Gold Member

jas007

Posted
Posted
10 hours ago, Lacessit said:

Why wouldn't the OP either buy bank shares for the dividends, or live on the interest from funds on deposit?

 

at 6% interest, that's 780,000 baht pa. More than enough to live on. The capital is preserved.

 

Annuities reduce the risk of outliving one's savings. They also are cream for the insurance companies if one dies early.

Unless I'm missing something, isn't that presuming a bit much? What happens if the bank becomes insolvent? No interest, no dividends, no nothing.  

 

At this juncture, is there really anything that's 100% guaranteed?  I don't think so.  

Yolando Rookie Member

Yolando

Posted
Posted
10 minutes ago, jas007 said:

At this juncture, is there really anything that's 100% guaranteed?  I don't think so.  

 

True, but an annuity is not any safer than a well diversified portfolio.  It is not 100% guaranteed income like the salesman tries to tell you, and you pay very high fees for them.

jas007 Gold Member

jas007

Posted
Posted
10 minutes ago, Yolando said:

 

True, but an annuity is not any safer than a well diversified portfolio.  It is not 100% guaranteed income like the salesman tries to tell you, and you pay very high fees for them.

Sure. That's  the point.  Nothing is certain.  Even an S&P 500 index fund is not the safe haven it once was.  Everybody thinks that, though, which is why it's no longer necessarily true.  People hold such funds as some sort of security blanket, and yet once that's the conventional wisdom, look out!  What would happen if 90% of the Index's investors all headed for the exit at once?  

Liverpool Lou Star Member

Liverpool Lou

Posted
Posted
1 hour ago, Yolando said:
11 hours ago, Liverpool Lou said:

As the layman that he clearly is, perhaps he wants the peace of mind of a guaranteed income every month for the rest of his life without the risk of market movements.

Much better to just buy government bonds then.

Do government bonds provide a guaranteed level of monthly income?

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