# Buying a pension annuity - who's got best rates



## runner

Does anyone have up to date annuity purchase rates in Ireland and what companies have the best rates to buy same?


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## GSheehy

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.


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## runner

thank GS.
I found this link to an Irish Life calculator which is a great help just now.
Anyone know if these things are up to date?
https://www.pensionplanetinteractive.ie/ppi/public/loadPensionChoice.action


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## GSheehy

runner said:


> Anyone know if these things are up to date?


 
Yes.


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## oopsbuddy

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!


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## Brendan Burgess

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.


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## runner

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?


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## Brendan Burgess

absolutely shop around. 



> Its only a small value fund going back 20 years to a previous life



Annuities usually cease on death of the annuitant?


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## runner

Annuities usually cease on death of the annuitant?

On the internet nobody knows you are dead!


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## boaber

I'm not aware of any variable annuities in the Irish market?


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## Bedlam

*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


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## jpd

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).


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## umpsty

By using a independent financial advisor to shop arround the life Insurance Comapnies on your behalf, I would suggest you would get best value.


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## LDFerguson

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).


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


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## Bedlam

Hi Liam,

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

Many Thanks

Bedlam


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## 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


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## Anfear

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.


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## SteH

runner said:


> thank GS.
> I found this link to an Irish Life calculator which is a great help just now.
> Anyone know if these things are up to date?
> https://www.pensionplanetinteractive.ie/ppi/public/loadPensionChoice.action



They have a better one here: [broken link removed]


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## Badgolfer

*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


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## LDFerguson

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


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## Happy Girl

Liam under pros you say _"....and/or a spouse's income should you die first"._ Under Cons you say  "_annuity dies with you_". Does one not contradict the other? Either it dies with you or it continues to provide an income for spouse. Grateful for further clarification on this.


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## Homer

Happy Girl said:


> Liam under pros you say _"....and/or a spouse's income should you die first"._ Under Cons you say  "_annuity dies with you_". Does one not contradict the other? Either it dies with you or it continues to provide an income for spouse. Grateful for further clarification on this.



Assuming you survive to the end of the guarantee period (typically 5 years, although you can buy an unguaranteed annuity if you wish) the annuity dies with you, *unless* you opt for some or all of it to continue to be paid to a dependant *and* that dependant outlives you.  Any options you choose (guarantee period, dependant's pension, increases) will reduce the annual pension you receive.


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## LDFerguson

Thanks Happy Girl & Homer, 

I've amended the post to try to make it a bit clearer.


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## Brendan Burgess

A new (?) website pensionannuity.ie is now doing execution only quotes from Zurich Life. It would be interesting to see if these compete with New Ireland or Irish Life.


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## LDFerguson

Just to update this thread, Standard Life are currently competing for annuity business and so should be on people's short-list.  A point to be remembered is that companies come in and out of the annuity market so whie this post is valid at the time of writing (April 2013) it might become obsolete if, for example, Standard Life choose to stop competing for annuity business in the future.


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