How much of my pension pot will I lose?

I have been saving into 3 separate personal pension plans for several
years. I am looking to "convert" them all to a monthly pension next
year.
I can't believe it's as simple as looking up the best annuity rates on
the web, asking for the money and giving it to the annuity company.
I guess a Financial Advisor will be involved somewhere. How much will
it cost and how does he get paid?
If these questions have all been answered before could you give me the
FAQ link.

Thanks Mike

Re: How much of my pension pot will I lose?

<> wrote in message
news:
>
> I have been saving into 3 separate personal pension plans for several
> years. I am looking to "convert" them all to a monthly pension next
> year.
> I can't believe it's as simple as looking up the best annuity rates on
> the web, asking for the money and giving it to the annuity company.
> I guess a Financial Advisor will be involved somewhere. How much will
> it cost and how does he get paid?
> If these questions have all been answered before could you give me the
> FAQ link.
>
> Thanks Mike
>

Well, it could be that simple. You'd probably want to put all three schemes
into one annuity. Are you sure that none of your present pensions has a
guaranteed annuity rate as part of the deal? Have you considered drawdown
and/or with-profits annuities? Will you be floored by the lifetime limit
questionnaire. If you're happy with all this, then go ahead by yourself.

But if you go to an IFA (with the I, not without it!) then he should look at
all the best rates and recommend one. This may or may not be the one with
the most commission, but it should be the best for you. He will get some
commission and if you had done it yourself the rate would have been exactly
the same but nobody would get any commission. So why not consult an advisor?

Of course, he may charge you a fee and not take any commission and that
would improve the annuity a bit. But it's only by the advisor refunding
commission that you can get an improvement. Doing it yourself will not
result in this.

Some companies will only deal via IFAs.

Rob Graham

Re: How much of my pension pot will I lose?

wrote:
> I can't believe it's as simple as looking up the best annuity rates on
> the web

Simple! You have to decide if you want the payments:
- flat rate, index linked or fixed % increase
- guaranteed for x years or no guarantee
- spouse gets nothing/50%/100% on your death
- paid monthly/six-monthly/annually
- paid at the beginning/end of the month
- paid with or without "apportionment" (?)

I couldn't find any league tables or websites that gave all the options for
any provider.
--
LSR

Re: How much of my pension pot will I lose?

"LSR" <> wrote in message
news:
> wrote:
> > I can't believe it's as simple as looking up the best annuity rates on
> > the web
>
> Simple! You have to decide if you want the payments:
> - flat rate, index linked or fixed % increase
> - guaranteed for x years or no guarantee
> - spouse gets nothing/50%/100% on your death
> - paid monthly/six-monthly/annually
> - paid at the beginning/end of the month
> - paid with or without "apportionment" (?)
>
> I couldn't find any league tables or websites that gave all the options
for
> any provider.
> --
> LSR
>
>



Is fun to play with

Re: How much of my pension pot will I lose?

If you look at Annuity Direct's website, they have a quote facility
which gives the current top rates.

As mentioned, some of the insurance companies can be contacted
directly, but others only deal with IFA's (such as Scottish Equitable).

Remember that Annuity Direct is an IFA, who deal mainly with
post-retirement planning.

But as Rob mentioned, if you go to companies such as Norwich Union or
Legal & General to purchase an annuity, any commission they would pay
to an IFA will in all likelihood just be retained in their coffers.

Therefore, when dealing with annuities, you may as well use an IFA to
do the donkey work. Otherwise, you'll be probably on the phone each day
to various insurance companies tracking and chasing up the transfer
paperwork.

Rgds
Neil.

Miss L. Toe wrote:
> "LSR" <> wrote in message
> news:
> > wrote:
> > > I can't believe it's as simple as looking up the best annuity rates on
> > > the web
> >
> > Simple! You have to decide if you want the payments:
> > - flat rate, index linked or fixed % increase
> > - guaranteed for x years or no guarantee
> > - spouse gets nothing/50%/100% on your death
> > - paid monthly/six-monthly/annually
> > - paid at the beginning/end of the month
> > - paid with or without "apportionment" (?)
> >
> > I couldn't find any league tables or websites that gave all the options
> for
> > any provider.
> > --
> > LSR
> >
> >
>
>
>
> Is fun to play with

Re: How much of my pension pot will I lose?

<> wrote in message
news:
> But as Rob mentioned, if you go to companies such as Norwich Union or
> Legal & General to purchase an annuity, any commission they would pay
> to an IFA will in all likelihood just be retained in their coffers.
>
> Therefore, when dealing with annuities, you may as well use an IFA to
> do the donkey work. Otherwise, you'll be probably on the phone each day
> to various insurance companies tracking and chasing up the transfer
> paperwork.

ISTR you can get execution only deals from some financial services companies, where
they refund most of the commission (in the same way as you can for unit
trusts/pensions/ISAs etc).

--
Andy

Re: How much of my pension pot will I lose?

Quite true, but any execution-only deals may depend on the value of the
pension funds in question.

Things may be slightly different now, but I recall that commissions on
open-market option annuities were about 1% of value of the pension
funds.

If the value of the pension fund is over 6 figures, then negotiating a
commission rebate will not be much of a problem.

However, if the value of the pension funds was, say, =A325,000, I doubt
that many financial services companies would rebate commission (unless
you were a long-standing client), because they would be effectively
earning a pittance anway for doing a lot of work.

I know that mentioning of the words 'Financial Advisor' + 'Commission'
in this newsgroup is often like waving a red flag at a bull, and while
everyone can quote instances of advisors taking obscene amount of
commission for basically doing f**k all, I feel that when it comes to
dealing with 'open-market option' annuity cases, most do actually
deserve to earn every penny they make out of it.

The simple reason is that they are an absolute pain in the a**e to deal
with. Rates move very quickly, and are usually only binding for 14 - 18
days, while you are at the mercy of insurance companies who drag their
heels when you are trying to get them to transfer money to a different
insurance company who is offering better annuity rates.

I suspect that if many advisors could avoid dealing with these
altogether, they probably would...


Andy Pandy wrote:
> <> wrote in message
> news:
> > But as Rob mentioned, if you go to companies such as Norwich Union or
> > Legal & General to purchase an annuity, any commission they would pay
> > to an IFA will in all likelihood just be retained in their coffers.
> >
> > Therefore, when dealing with annuities, you may as well use an IFA to
> > do the donkey work. Otherwise, you'll be probably on the phone each day
> > to various insurance companies tracking and chasing up the transfer
> > paperwork.
>
> ISTR you can get execution only deals from some financial services compan=
ies, where
> they refund most of the commission (in the same way as you can for unit
> trusts/pensions/ISAs etc).
>=20
> --
> Andy