I am looking for some help and thought that I should talk with the people who look after my savings for a pension.
Let me explain. I have a different outlook on my future and am keen to understand what I can do as a 63 year old who has a limited mental capacity due to a bike accident on Southwark Bridge in November. At the same time I am fascinated by the choices available to people like me who have saved hard through out their lives. I want to know what the choices are but I want an obvious choice for me.
This is the story of how choices were laid out, how I became confused over what to do and how I ended up feeling hopelessly out of my debt.
I decided to explore yesterday morning my options using my insurer (Legal & General) who have offered me support on building money up. I have to say that at every step I was treated with great care and sensitivity but I wonder if I was “advised” at any step. I made it clear that I had taken one withdrawal from the pot to ensure that it was “tax free” following the last budget. Because of this , the first L&G support person said he could no longer speak to me and I waited some time till I could be introduced to a lady who admitted to be of my age.
I asked for options provided to those keen to convert pot to pension and this alerted the lady to a service offered to those who wanted to have a full scrutiny of the market. It took another wait but eventually I was given the telephone number of what sounded like an annuity broker. To be honest , I felt I was asking the wrong questions.
Rather than phoning the broker, I decided to check out the website of Annuity Ready.
Quotations are provided by Annuity Ready on a non-advised basis. This means no advice is given or implied. You are solely responsible for deciding whether the policy is suitable for your needs.Annuity Ready is a trading style of Investment Discounts On Line Ltd and is part of the Legal & General Group.
Investment Discounts On Line Ltd is authorised and regulated by the Financial Conduct Authority, FCA Number 197451. Our operating address is: The Edge, Eden Business Park, Penrith, Cumbria, CA11 9FB. Telephone 0800 326 5479.
Our registered address is: One Coleman Street, London, EC2R 5AA. UK Company Registration No. 04231834. Annuity Ready All Rights Reserved.
Copyright © 2024 – Annuity Ready
This worries me and worries me increasingly. This information can only be found at the very bottom. It is not what you see when you enter the site.
First of all, for the second time I’m being told that I’m not getting advice , implying that if I want a discussion about my service, I had better go elsewhere. Secondly, I’m understanding that the FCA who look after advice also look after Annuity Ready.
Finally, I discover that what I am being offered is a part of Investment Discounts On Line Ltd , which is owned by Legal & General, who have managed by pot for decades. L&G appear as one of the providers offered as part of the investment discounts on line. Why not use a broker like Retirement Line rather than one which you own yourself?
Excuse me but why is what is being offered called a “Pension Annuity”? I decided to look at what happens when you look up a pension annuity and found this site from L&G which is not broking but offering L&G annuities
Now I am fairly experienced in this but I have no idea what a Fixed Term or Cash Out Retirement Plan and have no idea why I’d be wanting an annuity if I had a Defined Benefit Pension. I am not saying that L&G are confusing , just that they are obliged to protect potential customers from doing the wrong things.
Further information follows about which continues the eligibility for online help from Annuity Ready (Investment Discounts Online). Everything is I am sure compliant with the FCA’s requirements but as I read on , I found myself getting into boggy areas which I don’t properly understand. What was happening to my money and what did this mean?
I recognised that I was being led to a conversation -this is the number that I got after 35 minutes from the helpline I started with. The idea of purchasing an annuity from a lifetime of saving sounds odd. I do not mean to be rude to Legal & General but here are the reasons I am uncomfortable with an organisation offering a “pension Annity”, I am worried that the offer is from both an annuity and an investment discount company and most of all I am concerned that it is offering a range of company’s options while being owned by one of them- L&G.
L& G is obviously one of five leading providers of annuities – the annuity offered by another part of the company which ultimately owned the site and the support that sat behind the telephone.
I was pleased that Annuity Ready offers a “whole of market comparison”. If the whole of market is provided by six providers as advertised on the site then I am disappointed, I checked on Retirement Line’s site (80% of their broking is with 5 insurers).
Alternatively you can go direct to L&G. If I go to L&G’s Pension Annuity site, I am offered a range of other options but only L&G’s “Pension Annuity”. But a pension is not an annuity. I get a pension from my employer’s pension fund which is paid to me with inflation protection and can benefit from surplus in the pension fund. I don’t think you get that from a Pension Annuity.
More choice is thrown at me, including the choice to compare L&G’s Pension Annuity.
There are a lot of options hiding behind these “next steps” and I suspect that I will quickly flee to an adviser to get more than choices and some advice. I will do so because I am concerned about lack of independence and because I need clear direction.
I will of course only be acceptable to an adviser if I have a pension pot of sufficient size or a wish to pay substantial fees independent of the pot.
I am sorry, but I want more than this, I want an obvious stand-out option offered by L&G which rewards my time with that firm and I want to know what happens to my money once I have passed it to the organisation that pays me my pension. In short, I want a default pension option. I do not see people following the options available when I look at FCA choice making on what to do with pensions. Instead I see a mess and now I understand where confusion creeps in.
The current situation is not satisfactory for me and this sends me back to my task for 2025 – the task of making life simple , easy and worth living for decades to come. I believe that the service I got yesterday was very polite but inadequate. I hope that I will be able to hanging on long enough to help people make decisions on how to swap pot for pension in a better way. I hope that L&G, its Trustees, IGC and their executive will read this and realise I am serious and keen to help. I seriously want to help myself and thousands of others.
The algorithms are navigating the regulation to avoid responsibility. Is this “guidance” or a “nudge” into mediocrity.
Similar efforts are made in the IFA market by producing lengthy jargon filled reports that no one reads.
Labour have a challenge and will inflict the pain in the first two years in the hope that by 2029 memories will have faded and productivity has returned the prospect of abundance.
Keep on casting the pearls of wisdom
You may find this truly independent comparison tool helpful.
https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/compare-annuities
Annuities with inflation proofing are available
There is also the helpline on 0800 011 3797
I do hope your recovery continues
Hello Henry
Just to state the obvious: if you have experienced that much difficulty when you are well-skilled in such objectives, what does it mean for the average ‘punter’. They might understand money but find finance confusing.
Few in the Finance Industry speak highly of the FCA etc yet what alternative does the Government have when so many come to grief and end up ‘on the doorsteps’ of the FCA, Ombudsmen etc.
Meanwhile, Happy New Year and my best wishes for a speedy improvement with your unfortunate injuries.
Kind regards,
Tim Simpson
I don’t think the FCA or the FOS see that many pensions cases in any given year. The volumes are taken up by other financial services.
Byron, I was surprised that I was asking for a pension from my savings. I suspect that the Pension Annuity is the nearest answer but they aren’t quite what I had in mind!
Philip Geddes over on the LinkedIn version of this blog says “Having something that looks and feels like a DB pension but has investment upside with no downside seems wishful thinking.”
Philip’s background as a professional in tax before his own retirement may make him
biased to say exactly what he’s written there.
I think you may instead be desiring “something that looks and feels more like a DB pension, but is a pot of savings which may yet have investment upside, although there may be downside too”.
The value of a member’s pension in DB is usually effectively halved on death, and state pension for widows or widowers is similar at best.
Keeping your pensions saving in, for one example, a SIPP, on the other hand, means you could still have some investment upside but also have to live with downsides.
But you can draw down as and when you require, more often in lumps perhaps, rather than by regular monthly instalments?
After death, what’s left in a SIPP is now to be taxed before being redistributed. But unless all of the investment fails that’s still more than zero in a DB or state pension after both member and partner dies.
Life’s expenditures are a mixture of regular monthly (eg day-to-day living expenses) and lumps (cruises, weddings, parties generally, replacement assets, etc.)
Some of us may be confident, yet realistic, enough to ride the bumps of the roller coaster using draw down, while others require the certainty (but the lower value in the hand) of an assured solution.
Which is it to be, Henry? You decide.
I do wish that WordPress/Jetpack and LinkedIn offered us a way to consolidate blogs and discussion comments, but alas not for now.
Byron,
Gyron. are we ready for drawdown as the default solution? I suspect that most of us would like a solution that we trusted. I will go and fetch Philip Geddes which I had read on Linked in and I will continue the conversation on a blog. Being a little brain dead, you will excuse my slowness – I rely on you and Philip and thank you both!
Sentences like Byron’s, “Having something that looks and feels like a DB pension but has investment upside with no downside seems wishful thinking.”, are confusing. A DB pension scheme is not an investment fund whose raison d’être is investment upside. A DB pension scheme has rules that deliver a pension related to earnings during working life. “Upside”, “downside”, gilt yields, etc, don’t come into it: the benefits are defined. The clue is in the name. All that is required is that the funds make a sufficient IRR while they are invested from the time they are paid as contributions until they are drawn as pensions, something that is implicit in the design of the scheme.