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Started by robbie76 on Jul 22, 2016 12:17:10 PM
Opening the pension pot.

The time has come. Advice if possible please on best options and selecting an independent financial advisor.

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robbie76 - 22 Jul 2016 12:27:46 (#1 of 38)

I need to take 25% tax free from some small Free Standing AVC's and convert the rest to annuities. I've had the initial telephone conversation with my assurance company who hold the policies, awaiting pension pack.

Two issues really;

1) Does anyone have suggestions of what best to look for when choosing an annuity? Clearly, nothing is guaranteed but where should I look for best performance and to compare fees/charges?

2) My circumstances mean that have to get a financial adviser if only to sign off on the fact that I have taken advice. Can anyone tell me what I might have to pay for annuity advice?

Many thanks in advance.

thisonehasalittlehat - 22 Jul 2016 12:28:51 (#2 of 38)

I think it's illegal for anyone here to give you any advice.

HorstVogel - 27 Jul 2016 06:14:39 (#3 of 38)

I thought we lived in a free world.

RosyLovelady - 27 Jul 2016 07:04:59 (#4 of 38)

No, as a nation we voted to put an end to all that human rights mallarkey.

darkhorse - 27 Jul 2016 07:28:06 (#5 of 38)

Some initial thoughts.

Do you have any health conditions? An enhanced annuity might be suitable (it'll pay more in expectation of your shorter life expectancy).

Do you want a partner benefit - for it to go to your spouse, if you have one, should you die?

Do you want a guarantee period?

bossab2 - 27 Jul 2016 07:47:28 (#6 of 38)

Good thoughts.

And index linking

darkhorse - 27 Jul 2016 07:57:49 (#7 of 38)

You can get some "non-advice" type advice by taking your pension pot to a broker who does "open market option" sale of annuities (bit like getting a comparison table).

Or you can pay a bit more for suitability advice from an IFA.

I helped a relative through this stuff, so my knowledge is about the level of what you could get from the relevant Moneysavingexpert page....

robbie76 - 27 Jul 2016 09:28:27 (#8 of 38)

Thanks, I really have to get this underway immediately not so much to buy an annuity but to get 25% cash to do some work on the house. Obviously I don't want to make a bad decision about the annuity though.

No health conditions, would like it be be passed over to partner or son in event of my demise.

Guarantee period....index linking...I imagine there is some trade off if taking these options?

I haven't had a 'financial adviser' for some time and I've a pathological distrust of salesmen so I'd like to be a bit forewarned before I talk to one.

darkhorse - 27 Jul 2016 09:37:54 (#9 of 38)

If you go for the non-advised sale they specifically tell you they're just showing you the market and not recommending the most suitable, so you know it's your call.

I know nowt about index linking (other than what it means) I'm afraid!

robbie76 - 27 Jul 2016 09:46:17 (#10 of 38)

OK, cheers. I'll look into that. That will help me get an idea of the market. Sadly, as my very modest pot is over minimum value I have to have signed confirmation that I've taken independent advice. I just want to keep that to a minimum.

HorstVogel - 27 Jul 2016 10:41:49 (#11 of 38)

index linking would be important considering the current low interest rates



of course I'm not recommending anything, just muttering

robbie76 - 27 Jul 2016 11:05:00 (#12 of 38)

Thanks.

InternationalVicar - 01 Aug 2017 08:11:55 (#13 of 38)

A year later, Robbie is now Robbie77, but for info:

I need to take 25% tax free from some small Free Standing AVC's and convert the rest to annuities.

if they are less than £10,000 you can cash the whole lot in.

A bit larger than that and an annuity will be poor value or unavailable.

If instead you can take the 25% and leave the rest for further flexible drawdown. This is will affect your ability to make further contribution.

The Pensionwise help line wold probably be best initial source of real info.You only get one chance to take advice before messing up the whole thing on the advice of internet wrong'uns.

Electro2 - 02 Aug 2017 18:09:10 (#14 of 38)

HMRC repays £26m in overpaid pension tax: how to claim it back...

https://news.which.co.uk/2017/08/02/hmrc-repays-26m-in-overpaid-pension-tax-how-to-claim-it-back/pugpig_index.html

LobsangRampa - 02 Aug 2017 18:15:53 (#15 of 38)

Look at flexible drawdown. Annuities are pretty poor value at the moment. Look at the potential returns from leaving the 75% invested. Markets have been pretty good of late. S&P record high and Trump (!) reckons the U.S. still has a way to go.

Hilary - 04 Aug 2017 09:12:10 (#16 of 38)

Look at flexible drawdown.

And if circumstances permit, consider not taking the 25% tax-free portion upfront all at once, but, instead, each time you draw down a portion of the fund. In the current tax year that would allow you to take £15333 tax-free, assuming no other taxable income. By 2020, if the govt keeps to its pledge to increase the personal allowance, that figure will be £16667.

johnarrgh - 31 Aug 2017 11:05:00 (#17 of 38)

I have jus had a pension forecast and trying to consider which of the two options to go for. A bigger annual pension or a bigger tax free lump sum. It is not a large pension by any means and to be honest I have no idea really what is classed as a decent pension. Anyway my question is if a I opted for a pension sacrifice in favour of a larger lump sum, so the core lump sum + the additional lump sum. Should I then be looking to by an annuity with this lump sum, is that what folk usually do? I am happy to give rough figures if that would help?

TommyDGNR8 - 31 Aug 2017 11:09:00 (#18 of 38)

Everyone is different, John. You really need to see an IFA about this, not trust your retirement to this mob.

Electro2 - 31 Aug 2017 11:22:56 (#19 of 38)

What Tommy said.

15 years ago after losing an AVC with the failed Equitable Life, I was offered redundancy and 3 options for taking my work pension and I chose the middle 50/50 and invested the cash and almost managed to live on the pension: topping it up with another pensionable job.

I now wish that I'd taken the 1st option - big pension and small lump sum. Although the lump sum investment did help a relative from losing her home.

johnarrgh - 31 Aug 2017 11:38:28 (#20 of 38)

Ok guys cheers.

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