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Over 50's club

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Velociraptor Jun 2021 10:04am, 2 Jun 2021 52,882 posts	Quote Pin Velociraptor I'd buy an annuity if I smoked, had a hideous family history of dying early from something, but had secret knowledge that I'd live to 150. And I suppose they have their place if you have a SIPP but no interest in managing money.
GregP Jun 2021 10:07am, 2 Jun 2021 127,082 posts	Quote Pin GregP That first sentence is brilliant. Thanks V'rap. As I understand it, if I retire at 63 I need to live to 103 to break even. That can't be right though, surely?
Velociraptor Jun 2021 10:14am, 2 Jun 2021 52,883 posts	Quote Pin Velociraptor I've had a wee google, but I can't see any way of getting a ball park annuity estimate without divulging my email address. Which is OK because I'm just being nosy and have no intention of actually buying one. I can remember a point in the recent past where drawdown rules were changed in a way that made buying an annuity no longer an obvious choice for me.
Velociraptor Jun 2021 10:18am, 2 Jun 2021 52,884 posts	Quote Pin Velociraptor That could be right, Greg. I remember something similar from back in the days when I wrote simple financial articles for the GP trade press. Insurance companies aren't in the business out of altruism. I can see a place for annuities, but the pension pot of a healthy young retiree who's not scared of drawdown is not that place.
um Jun 2021 10:21am, 2 Jun 2021 4,777 posts	Quote Pin um There's a summary here (fairly neutral, I think) moneyfacts.co.uk But I think v'rap has it right - you need a 'published' life expectancy of a few years, but ecretly know you'll live for ever. The figures I got when I last looked (ie my financial advisor) weren't good for annuities. When I say 'weren't good', I mean not worth 10 secs consideration. Unless - maybe - there may be something in it if you're lucky enough to be over the lifetime allowance to 'avoid' higher rates of tax? or to offload a lump sum? Or you want to max out your lifestyle & leave nothing to rellies.
B Rubble Jun 2021 10:27am, 2 Jun 2021 2,770 posts	Quote Pin B Rubble It's about 4%. There is a way you can check how much you would get at: pensionwise.gov.uk If you use a £500,000 pension pot to buy an annuity, you could get: £125,000 tax free and get: £15,700 guaranteed annual taxable income, for the rest of your life This estimate is for a single-life non-escalating annuity. You may wish to choose a joint-life annuity that pays your spouse or partner after you die, or an enhanced annuity which pays more if you smoke or have a medical condition.
GregP Jun 2021 10:33am, 2 Jun 2021 127,088 posts	Quote Pin GregP so 24 years? Retiring at 63 I'd need to live to 87? Unlikely, but not impossible. My dad lived to 90 but my mum died in her seventies and I have a past that involves strong liquor. Plus, as I understand these things, I'd 'need', or at least 'want' more than the median amount in my sixties and less in my eighties?
Velociraptor Jun 2021 10:34am, 2 Jun 2021 52,885 posts	Quote Pin Velociraptor Thanks, B Rubble. That's a useful link.
GregP Jun 2021 10:34am, 2 Jun 2021 127,090 posts	Quote Pin GregP Yes, what she said, also.
Nick Cook Jun 2021 10:39am, 2 Jun 2021 35,227 posts	Quote Pin Nick Cook When I consolidated my pension pots a few years back, the advisor recommended a scheme and said, " This can easily be converted to a drawdown account when the time comes. You won't want an annuity will you?".