Annuities
We do not directly advise on specific annuities at Accudo, this is because we have found that those brokers who specialise in annuity sales only, have significantly higher levels of business in this area than Accudo and are therefore able to obtain better rates for clients, both for standard annuities and enhanced annuities (those which offer better rates for ill health reasons or lifestyle factors).
As a result of the above, we work closely with a specialist annuity provider who can provide you with market-leading rates and a good level of service, Accudo acts as an introducer in this arrangement and if you proceed with any annuity purchase we are paid an introducer fee, which is fully disclosed to you.
If you wish to evaluate your options at retirement i.e. weigh up the relative pros and cons of flexi access drawdown versus annuity, with reference to your specific circumstances, we are well placed to do this in terms of our knowledge, qualifications and experience. If FAD seems the most suitable route for you, we can help you in-house, if an annuity purchase seems more suitable we can refer you to our preferred broker.
As mentioned within the drawdown section of this website, there are circumstances where annuities are still appropriate, in our experience, these circumstances have tended to be one or a combination of the following:
- A need for a guaranteed income stream
- Low level of overall income which makes the client particularly vulnerable to a variable/investment-linked income which could fall below expenditure needs
- Low availability of other assets to support retirement and act as a safety net
- Low priority (or no priority) is given to the benefits left on death
- A lack of confidence/trust in investments and/or lack of experience and understanding
We have worked with many individuals where these circumstances have been relevant and in each case referred the client’s concern to our preferred broker and they have been happy with the level of annuity obtained. In some cases, this is the end of our role as there is no need for continuing investment or pension advice, in other cases clients have used the annuity broker for one or 2 of a collection of pensions only and we have continued to advise on the client’s other pensions (which have gone into FAD). This is often known in the industry as a Blended Approach.
This is the term given to a guaranteed annuity/income stream, blended with investment-linked income, to create a “best of both worlds” scenario, where there is a baseline guaranteed level of income but there are still funds left which offer the flexibility of withdrawal and the ability to pass on a remaining fund to one’s beneficiaries on death.