Experiences of buying an annuity
Discussion
I recently cashed in my SIPP for an annuity and thought I’d post here about the experience in case it is useful for others.
I decided to buy an annuity as I fancied having a small amount of guaranteed income to supplement other income from isas and other investments as I approach retirement (I am 58). I am self employed and also liked the fact that buying an annuity meant I could still make employer contributions to my SIPP (or actually a new SIPP as the old one was closed in the annuity process) going forward.
I spoke to several annuity brokers and an IFA. For whatever reason, the best rate, by some margin (about 3%) was with Hargreaves Lansdown.
My SIPP was with II so first step was to sell everything to cash. I was lucky with the timing with hindsight. The fund then got transferred to Just, which happened early Feb. The annuity started last week so the whole process took about 13 weeks. Just started the annuity from the date they received the funds which was a surprise but a pleasant one so last week I received the lump sum portion and a payment from 7 Feb.
I went for an RPI linked annuity with a 50% spouse benefit and a 20 year guarantee period. The guarantee was cheap relative to its value (a good bit of advice from the IFA although for whatever reason he couldn’t compete with HLs rate).
One of the advantages of the HL annuity engine is that the quotes are guaranteed for a period - usually 14 days. So in these volatile periods one can get quotes every day for a period and then pick the best rate. The difference between the best and worst rate during the period I was buying was around £600 or 2%. A meaningful difference.
All up if one is a confident self directed investor the HL process works pretty well although I can see why others may prefer the security of an IFA.
Happy to answer further questions if any.
I decided to buy an annuity as I fancied having a small amount of guaranteed income to supplement other income from isas and other investments as I approach retirement (I am 58). I am self employed and also liked the fact that buying an annuity meant I could still make employer contributions to my SIPP (or actually a new SIPP as the old one was closed in the annuity process) going forward.
I spoke to several annuity brokers and an IFA. For whatever reason, the best rate, by some margin (about 3%) was with Hargreaves Lansdown.
My SIPP was with II so first step was to sell everything to cash. I was lucky with the timing with hindsight. The fund then got transferred to Just, which happened early Feb. The annuity started last week so the whole process took about 13 weeks. Just started the annuity from the date they received the funds which was a surprise but a pleasant one so last week I received the lump sum portion and a payment from 7 Feb.
I went for an RPI linked annuity with a 50% spouse benefit and a 20 year guarantee period. The guarantee was cheap relative to its value (a good bit of advice from the IFA although for whatever reason he couldn’t compete with HLs rate).
One of the advantages of the HL annuity engine is that the quotes are guaranteed for a period - usually 14 days. So in these volatile periods one can get quotes every day for a period and then pick the best rate. The difference between the best and worst rate during the period I was buying was around £600 or 2%. A meaningful difference.
All up if one is a confident self directed investor the HL process works pretty well although I can see why others may prefer the security of an IFA.
Happy to answer further questions if any.
williaa68 said:
I recently cashed in my SIPP for an annuity and thought I’d post here about the experience in case it is useful for others.
I decided to buy an annuity as I fancied having a small amount of guaranteed income to supplement other income from isas and other investments as I approach retirement (I am 58). I am self employed and also liked the fact that buying an annuity meant I could still make employer contributions to my SIPP (or actually a new SIPP as the old one was closed in the annuity process) going forward.
I spoke to several annuity brokers and an IFA. For whatever reason, the best rate, by some margin (about 3%) was with Hargreaves Lansdown.
My SIPP was with II so first step was to sell everything to cash. I was lucky with the timing with hindsight. The fund then got transferred to Just, which happened early Feb. The annuity started last week so the whole process took about 13 weeks. Just started the annuity from the date they received the funds which was a surprise but a pleasant one so last week I received the lump sum portion and a payment from 7 Feb.
I went for an RPI linked annuity with a 50% spouse benefit and a 20 year guarantee period. The guarantee was cheap relative to its value (a good bit of advice from the IFA although for whatever reason he couldn’t compete with HLs rate).
One of the advantages of the HL annuity engine is that the quotes are guaranteed for a period - usually 14 days. So in these volatile periods one can get quotes every day for a period and then pick the best rate. The difference between the best and worst rate during the period I was buying was around £600 or 2%. A meaningful difference.
All up if one is a confident self directed investor the HL process works pretty well although I can see why others may prefer the security of an IFA.
Happy to answer further questions if any.
Are you a bot?I decided to buy an annuity as I fancied having a small amount of guaranteed income to supplement other income from isas and other investments as I approach retirement (I am 58). I am self employed and also liked the fact that buying an annuity meant I could still make employer contributions to my SIPP (or actually a new SIPP as the old one was closed in the annuity process) going forward.
I spoke to several annuity brokers and an IFA. For whatever reason, the best rate, by some margin (about 3%) was with Hargreaves Lansdown.
My SIPP was with II so first step was to sell everything to cash. I was lucky with the timing with hindsight. The fund then got transferred to Just, which happened early Feb. The annuity started last week so the whole process took about 13 weeks. Just started the annuity from the date they received the funds which was a surprise but a pleasant one so last week I received the lump sum portion and a payment from 7 Feb.
I went for an RPI linked annuity with a 50% spouse benefit and a 20 year guarantee period. The guarantee was cheap relative to its value (a good bit of advice from the IFA although for whatever reason he couldn’t compete with HLs rate).
One of the advantages of the HL annuity engine is that the quotes are guaranteed for a period - usually 14 days. So in these volatile periods one can get quotes every day for a period and then pick the best rate. The difference between the best and worst rate during the period I was buying was around £600 or 2%. A meaningful difference.
All up if one is a confident self directed investor the HL process works pretty well although I can see why others may prefer the security of an IFA.
Happy to answer further questions if any.
You appear to have re-posted your previous post - https://www.pistonheads.com/gassing/topic.asp?h=0&...
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