Any Whizz kids who know about pensions and annuities.

JohnD said:

i'm sure the dork will tell us that he has been close personal friends with the last ten chancellors, and advised them how to design pension law.

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You are a Marxist revolutionary. Please explain to us what exactly does Marx says about pensions?

conny said:

Total value to put in is around £12k

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conny said:

I'll be 66 next week, am a life long smoker and have had CKD for the past 15-16 years.

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this may seem hard-hearted, but let's suppose that a lifelong smoker with kidney disease will be lucky to see 80.

From age 66, you could put £12,000 in a tin box under the bed and take out £800 a year for 15 years

Any level annuity offering less that this seems to me to be poor value.

In fact the life office will invest your money (they will pretend they buy government bonds, but they don't) and will be disappointed if they make less than 10% p.a. so the fund will likely be worth more when you peg out than it was when you started. You will see nothing of the growth.

so they will be rubbing their hands in glee at the profit they make from people like yourself.

btw this is the link I use to look up annuity rates

last updated 8 Aug


the figures are shown for a £100,000 lump, so divide by 100 and multiply by 12 in your case

annuity rates are inching up as interest rates rise.



lots more on that page

you might get higher rates as an "impaired life" in poor health.




Table 1 Notes:
Annuity rates based on a central London postcode (other locations such as Peterborough or Liverpool could be up to 4% higher or Dundee and Newcastle could be 5% higher) using a purchase price of £100,000 - this assumes an original pension fund of £133,333 and after the tax free lump sum of £33,333 has been taken. Income is gross per year (before deduction of tax) and payable monthly in advance for the whole of the annuitant's life. No medical enhancements are included in these annuities. The pension annuity table is only a guide as annuities change frequently. Figures shown have been adjusted for Unisex annuity rates on a gender neutral basis and joint life rates assume both are the same age.

Doug99 said:

All I know is a pension can rise with inflation (eg state pension), but an annuity is fixed for life.

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not necessarily

but if you get one with escalation, you pay heavily for it

and IMO not good value.

Some advice - don't listen too hard to any advice, from anyone one who doesn't have all your figures and knows what they're talking about!

There's lots of proper free advice, eg start at https://www.gov.uk/government/organisations/single-financial-guidance-body .

That's not to say a lot of bright individuals do learn a heck of a lot as a hobby, help their friends, learn from pros etc. There's a couple of those on the Moneysavingexpert site, as well as a couple of IFA's.
I'm not drawing a pension, but will have complications when I do.
The only thing I'll point out which folk I know forgot, is to consider transferring money to eg your wife if she's not paying tax.
Doing the investments yourself rather than going for an annuity does give you flexibility, but I don't think the stock market's good performance of the last few years can be relied on now.

JohnD said:

not necessarily

but if you get one with escalation, you pay heavily for it

and IMO not good value.

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I'd agree. Don't forget we tend to need less money as we get older. If you need to go into an expensive home, you may have to sell your house anyway.

Thanks for all the replies guys.
Can I just assure everyone that I was querying the rates I had been given and not looking for advice on any particular scheme/company recommendations.
Looking at some of the links that have been posted I can see their can be wide ranging differences depending on what I choose to do with the money and will be seeking professional advice before choosing.
I certainly don't want some faceless company taking my money then giving me a pittance back each year in the hope I'll peg it before long!

conny said:

As the title says, are there any whizz kids, (or old fogeys), on here who know about pensions and annuities?

I am in the middle of 'cashing in' 2 very small pensions and thinking of buying an annuity. Total value to put in is around £12k
I'll be 66 next week, am a life long smoker and have had CKD for the past 15-16 years.
Two 'illustrations' I have received today show a 'pension' of between £31 and £35 per month, £421 yearly and £4,717 over 10 years.
Does this seem right to those in the know? If it does then it means I need to live till I'm about 95 just to break even with my 12k
By the time you take inflation into account I'll be lucky to afford a loaf of bread with a months payment!

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Its not particularly tax efficient, unless you can hold it in a stock ISA, but a junk bond will give you 3 times that return. I'm assuming these annuities are not index linked?

Google PGHY for example.