Buying a pension annuity - who's got best rates

R

runner

Registered User
Messages
1,094
Does anyone have up to date annuity purchase rates in Ireland and what companies have the best rates to buy same?
 
Market is pretty limited and you should 'shop around' from the list below. Just make sure the details are identical for all quotes.

Irish Life, New Ireland, Friends First, Canada Life(?)

This Blog Post (Own) may be of help with different terms etc.
 
Are you sure you need to purchase an annuity? You may be entitled to an ARF instead, and only draw out what you need. If you are obliged to buy an annuity, bear in mind that annuity rates are related to the prevailing interest rates at the time of purchase, so when interest rates are low, so are annuity rates, and your money won't go very far. At times of high inerest rates, annuity rates are also higher, so you buy more annual pension for your money. I understand that higher interest rates are just around the corner!
 
Irish Life and New Ireland are the only ones with competitive rates.

Most people buy their annuities from their pension fund manager, so it does not pay the life companies to compete.
 
Thankd for the help.
Its only a small value fund going back 20 years to a previous life, that I want to convert and wrap up. I may have to go the annuity route after taking the 25% taxfree sum.
Its with C/L at the moment, and I was really wondering whether I should shop aroundfor rates or just leave it with them to do the annuity?
 
Annuities usually cease on death of the annuitant?

On the internet nobody knows you are dead!
 
Annuity Purchase

Hi

Just wondering if I had a sum of money on deposit presently, is it possible to approach an Insurance Company to buy an annuity with this money or does the money have to come from your pension fund?

Thanks


Bedlam
 
Yes, you can buy annuities with money other than from a pension fund. This is a Purchased Life Annuity as distinct from a Retirement Annuity.

The tax treatment is different, in that a portion of the periodic payment is considered as a return of capital and thus is exempt from income tax whereas for a retirement annuity, the whole of the payment is liable to income tax (but you may, of course, have already received a tax-free lump sum).
 
By using a independent financial advisor to shop arround the life Insurance Comapnies on your behalf, I would suggest you would get best value.
 
jpd said:
Yes, you can buy annuities with money other than from a pension fund. This is a Purchased Life Annuity as distinct from a Retirement Annuity.

The tax treatment is different, in that a portion of the periodic payment is considered as a return of capital and thus is exempt from income tax whereas for a retirement annuity, the whole of the payment is liable to income tax (but you may, of course, have already received a tax-free lump sum).
Click to expand...

That brings me back - haven't seen Purchased Life Annuities in years. Are any companies still offering them?
 
Hi Liam,

If you come across a company that is offering them you might let me know please.

Many Thanks

Bedlam
 
Hi

Coming back to this topic I checked with a couple of Insurance Co's and none of them are offering Purchased Life Annuities.

On the matter of the lump sum could anybody suggest how best to invest this with a view to taking an income without eroding the capital please.

Thanks

Bedlam
 
Government bonds might be a reasonable choice - even though these are not completely risk free these days, but what is? Look at www.ntma.ie for more, but hold them to maturity to avoid variations in market value.
 
Annuity Vs ARF

Hi - I have two pension funds slowly beavering away - but now that I'm 65 I am thinking of drawing down one or both in 2010.

One of them qualifies as an ARF.

Generally is it the better option to go for the ARF rather than an annuity?

Thanks ...L
 
They're two very different things so neither is better. The decision will be based on your own circumstances and requirements.

Some pros and cons of an annuity:

Pros: guaranteed income for life, no need to worry about investments or investment performance as you get older, can be set up to provide an increasing income each year, and/or an optional spouse's income should you die first.

Cons: annuity dies with you, unless you die within the initial guaranteed period or have chosen the spouse's or dependent's pension options. Inflexible income stream.

Some pros and cons of an ARF:

Pros: Control - you can specify and change the level of income you want. You can choose and change your investment(s). Your ARF might provide a better income for you than an annuity. Or it might not. When you die your remaining ARF fund (if any) can be passed on to your estate.

Cons: No guarantees - you might run out of fund before you run out of life. Your chosen investments might perform poorly, drop in value etc.

This is only a back-of-envelope summary, not an exhaustive list.

Liam D. Ferguson
 
You must log in or register to reply here.
Back
Top