2023 Annuity Rates
- Thread starter sheddy
- Start date
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- Location
- Somewhere wet & hilly in NW England.
Do you mean set up a new fund or taking an annuity from a current fund?
Starting an annuity in retirement from existing fund
fossyant
Ride It Like You Stole It!
- Location
- South Manchester
You'll probably need a Financial Adviser. I'll need to do something with two pots that mature in the next 18 months, so listening in.
As always one these things, the answer will be “maybe”.
Rates are better now, but there are a number of things to consider.
If you have offspring to inherit, an annuity generally disappears when we shuffle off our mortal coil, whereas a DC pot could potentially be passed on free of inheritance tax.
Within annuities, there are ones that offer a flat rate which might sound the most appealing today, but will lose out to inflation as years go by…..or rise by a certain %, or include spousal elements to continue in the event of our demise, etc etc.
Rates are better now, but there are a number of things to consider.
If you have offspring to inherit, an annuity generally disappears when we shuffle off our mortal coil, whereas a DC pot could potentially be passed on free of inheritance tax.
Within annuities, there are ones that offer a flat rate which might sound the most appealing today, but will lose out to inflation as years go by…..or rise by a certain %, or include spousal elements to continue in the event of our demise, etc etc.
rogerzilla
Legendary Member
They're not as good value, per £100k of pot, as a typical DB pension is per £100k of notional transfer value. It's another way that DC pensions shaft you compared to DB.
Because my employer has buggered up our pensions by changing schemes over the years, I have a big DB plan and TWO smallish DC plans, although I have never worked for anyone else. I really want to take all the cash free lump sum from the crappy DC plans and clear them out, but HMRC doesn't allow plans to be aggregated even though they're all from the same employer and continuous service. One is just under £20k so I may be able to empty that under the small pensions rule. However, I'm going to have to take some tax-free cash from the DB fund, which means replacing the income it would have given me with "something" from what's left in the DC fund(s). Could be drawdown, could be annuity. I don't like risk and no-one really needs the inheritance, so I may have an annuity.
Because my employer has buggered up our pensions by changing schemes over the years, I have a big DB plan and TWO smallish DC plans, although I have never worked for anyone else. I really want to take all the cash free lump sum from the crappy DC plans and clear them out, but HMRC doesn't allow plans to be aggregated even though they're all from the same employer and continuous service. One is just under £20k so I may be able to empty that under the small pensions rule. However, I'm going to have to take some tax-free cash from the DB fund, which means replacing the income it would have given me with "something" from what's left in the DC fund(s). Could be drawdown, could be annuity. I don't like risk and no-one really needs the inheritance, so I may have an annuity.
