Enhanced annuities

[Mintoes]

Hi, does anyone have experience of negotiating an annuity for impaired health? Thinking of retiring and looking at options.

Thanks

[irishdave]

Hi i recently transferred a company pension to avail of the new pension rules ie tax free cash etc and my financial advisor did a search regarding annuities and yes you can get a substantial increase because of health problems. I have copd and diabetes and the best difference he found was more than 2500k per year worth taking the time to search for sure.

[Mintoes]

Thanks Dave, that was what I was sort of wanting to hear. I’ve contacted a few myself but not had much increase( I have severe asthma and bronchiectasis) I’ll keep looking.

[irishdave in reply to Mintoes]

It is worth using a financial advisor if possible , are you a smoker or past smoker the more medicines you are taking also helps but it sure takes time filling in all those forms and there are a lot of companies. If you like to message me maybe i can give you a few pointers and examples of my experience.

[soulsaver in reply to Mintoes]

Yes I have. Annuity rates are historically low & I wasn't impressed with the impairment uplift - but any uplift is worth having.

If you aren't financially 'savvy' get independent professional advice - you only get one go at this and it's complicated.

Make sure you get the best deal available - you can't undo the decision once taken - get plenty of quotes, from different providers; they vary by a surprising amount.

After much research, the best quotes I got was from Retirementline who are a broker who will search for the best deal for you from a range of providers, and show all the quotes like a compare-the-market result

retirementline.co.uk/landin...

They found the best quotes when I was looking two years ago.

They get paid by commission so effectively free to you and they tell you what commission they get (must by law).

You'll need to consider whether you want index linked or straight line which will make a big difference to quotes - but Retirement Line were happy to produce all sorts of 'what if' reports for comparison.

In the event of your early demise, you can elect for it to continue to pay your dependents/elected beneficiaries for a guaranteed period, in exchange for a reduced annuity...

...so get quotes for 0, 5, 10, 15, 20, 25, 30 years guaranteed payment periods to see how much difference it makes for each - it can be surprisingly small.

Try the Pensions board at Money Saving Expert for more input. forums.moneysavingexpert.co...

[Mintoes]

Thank you, your advice is so helpful- I have a work pension which is good but makes so much sense to look around. I’m hoping to work for another year so plenty of time but want to make the correct decision.

[soulsaver]

When you say 'works pension', if it's a 'DC' pot it'll be as above & relatively straight forward to get a feel for what you can achieve.

If it's a final salary scheme (Defined Benefit (DB)) and you want to buy an annuity instead of final salary benefits, you'll need to find out the cash equivalent transfer value (CETV) - which is sometimes on your yearly statement; if not or it's substantially out of date, you can ask the scheme administers.

A DB scheme will make a whole other level of complication as you'll need all sorts of risks assessments & in the event of early demise calculations, dependents & widows benefits etc., comparatives to take into account.

If the CETV is above £30k, the regulations require you to have advice of a specialist pensions transfer IFA... not cheap and can erode a small pot significantly.

If you need anything else just shout..

Best wishes

[Mintoes in reply to soulsaver]

Thanks for this. The aim is just to find out what’s possible from retirement line before any decision is made. After all you only get one chance to make the decision.

[irishdave]

Everything soulsaver says is right on the button cost me 6k to do my transfer from DB scheme.

[Mintoes]

Thanks for your reply, very useful.