Choosing an annuity


D

D55

Small pension pot of £37000-ish.
In the current economic climate.
Would a non-profit annuity (smaller pay off) be the wisest option
against a with-profit annuity, by a significant distance?
I'm thinking that in said current economic climate any
annuity that doesn't state 'garuanteed for life' might dissappear
as some financial investment the annuity relies on, goes belly up.

Would be grateful for expert opinions.

Thanks.

Arthur
 
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R

RobertL

I'm thinking that in said current economic climate any
annuity  that doesn't state 'garuanteed for life' might dissappear
as some financial investment the annuity relies on, goes belly up.
Who guarantees these "guaranteed for life" annuities?

Robert
 
A

Andy Pandy

Who guarantees these "guaranteed for life" annuities?
They're usually invested in gilts ie government bonds. And we all know
how safe they are, ask the Irish.
 
T

tim....

D55 said:
Who guarantees these "guaranteed for life" annuities?

Legal and General offer them.
Methinks you misunderstood the question

tim
 
F

Frank

Don't do an annuity. Put it in a SIPP, then:
Do a drawdown plan - which with new legislation should become even
more attractive.
You can take 25% tax free cash.
Use that to buy CASH ISAs with 5 year fixed rate bonds every year (=
layering)
Excess cash into stocks ISA - Gilts funds (just like an annuity would
invest)
When the 25% runs out, take as aggresively as possible from the
remaining pot and keep doing the same.

I see a great advantage in not doing an annuity is that you don't need
life insurance, because if you die, the pot is passed on.

Governments like annuities because they don't like inherited wealth
(makes for non-working 40/50 year olds). They would rather feed the
bonuses of the life insurance/annuity companies' execs.

I am convinced you will extract more from the SIPP pot this way than
handing it over for an annuity.
I'd love to hear any arguments to the contrary.
 
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D

David Woolley

Frank said:
I am convinced you will extract more from the SIPP pot this way than
handing it over for an annuity.
I.E. you are convinced you will die early but can't be bothered with an
impaired life annuity.
I'd love to hear any arguments to the contrary.
Annuities have a "death insurance" component, which means that, if you
live to 112, the annuity provider is likely to be out of pocket, but
with your system you may be destitute.
 
F

Frank

I.E. you are convinced you will die early but can't be bothered with an
impaired life annuity.


Annuities have a "death insurance" component, which means that, if you
live to 112, the annuity provider is likely to be out of pocket, but
with your system you may be destitute.
I have a couple of other pensions., so my aim is to empty the SIPP.
 
A

Anthony R. Gold

They're usually invested in gilts ie government bonds. And we all know
how safe they are, ask the Irish.
How is that comparable? AFAIK no country with its own national currency has
ever failed to pay off debts denominated in that currency. If the Greeks had
issued drachma debt and the Irish had issued punt debt there would not be any
concerns for their solvency today. The new problem is that the foolish
Europeans have confused support for Greek and Irish debt with support for the
currency. They are idiots. The very best thing for the credibility of the
Euro would have been to allow Greece and Ireland to default on their debts.

Tony
 
T

tim....

Frank said:
I have a couple of other pensions., so my aim is to empty the SIPP.
You can't (unless you do live to 112).

(Simply put) At any one time, you must always leave (theoretically) enough
money in the pot to buy you the annuity that provides the same income that
you would have got at the time you retired. (Though it's more complicated
than that and they are *considering* changing rules so that you only have to
leave enough to buy a "sufficient" pension, but most people wont have a big
enough pot to notice the difference here!)

tim
 
T

tim....

Anthony R. Gold said:
How is that comparable? AFAIK no country with its own national currency
has
ever failed to pay off debts denominated in that currency.
Try Argentina and Russia.

Or does declaring the currency worthless and issuing a new one not count as
"not honouring debts in that currency"?

tim
 
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A

Anthony R. Gold

Try Argentina and Russia.

Or does declaring the currency worthless and issuing a new one not count as
"not honouring debts in that currency"?
AFAIK Argentina never declared any currency worthless; the ARP peso was
convertible into ARA australes and australes were convertible into ARS peso.
Hyperinflation and not government decrees debased those currencies. The
beauty of issuing debt denominated in something you can print is that you
need never default until you also can't afford the paper and ink (Zimbabwe?).

Yes, Lenin did repudiate the imperial Russian debt.

Tony
 

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