The advice given to me recently on Capitals Gains was so helpful, that I 
dare come back again with a different question.

I have a friend, who is approaching 65, let's call him "Bill."

Bill has a pension payable in September, actually from Axia, who do not do 
impaired life annuities. He is waiting for an estimate now of the lump sum 
due. His wife is almost exactly the same age. Everyone involved is 
determined to refer him back to the original insurance agent, but Bill is an 
independent spirit that likes to do his own thing.

He is also a dead man walking. His health is terrible and, nobody including 
himself, expects him to live more than a few months at best.

It is a bad form of cancer, the worst, so there is no mistake. As you can 
imagine, he wants to do the best thing for his wife.

He hopes to make it to the pension date in late summer. He also wants to 
make decisions and sign the papers if he can. He has had long periods in 
intensive care and is well aware that he may be alive but unable to do 
anything.

He understands that he can take a proportion as a lumpsum, but that will be 
taxable. It seems sensible to take that and invest it to provide an income 
for his wife.

Is he broadly  right? Is there any chance of dispensation from the revenue 
to take the wole as a capital sum?

The balance which has to go into an annuity, is a problem.

He thinks it should go to an impaired annuity, he thinks, but not one of 
those "sales gimmick" ones where all you have to do is smoke 40 fags a day 
and claim you drink a bottle of whisky. He thinks he could and should get 
very much better terms.

He can produce documentation and the survival rates for this form of cancer 
are well known and documented - at about 1 percent at five years. Bill 
somehow has survived four, but with lots of ops and is now disabled. The 
situation is reminiscent of a Regency tontine, with him hanging on with 
enthusiasm.

I think the main question is, "Has he got the pension situation broadly 
right?"

Are there companies that specialise for annuities in such cases ? Is there a 
list? Are there any published esimates of figures?

Sorry to present such a dismal case, but Bill is far from depressed about it 
all, although not anxious to spend his energies fighting off over 
enthusiastic salesmen and women.

Thanks
GPG

"Pat Gardiner"  wrote in message 
news:Pq6dnTqCfOLIDq_VnZ2dnUVZ8vSdnZ2d@bt.com...
> The advice given to me recently on Capitals Gains was so helpful, that I 
> dare come back again with a different question.
>
> I have a friend, who is approaching 65, let's call him "Bill."
>
> Bill has a pension payable in September, actually from Axia, who do not do 
> impaired life annuities. He is waiting for an estimate now of the lump sum 
> due. His wife is almost exactly the same age. Everyone involved is 
> determined to refer him back to the original insurance agent, but Bill is 
> an independent spirit that likes to do his own thing.
>
> He is also a dead man walking. His health is terrible and, nobody 
> including himself, expects him to live more than a few months at best.
>
> It is a bad form of cancer, the worst, so there is no mistake. As you can 
> imagine, he wants to do the best thing for his wife.
>
> He hopes to make it to the pension date in late summer. He also wants to 
> make decisions and sign the papers if he can. He has had long periods in 
> intensive care and is well aware that he may be alive but unable to do 
> anything.
>
> He understands that he can take a proportion as a lumpsum, but that will 
> be taxable. It seems sensible to take that and invest it to provide an 
> income for his wife.
>
> Is he broadly  right? Is there any chance of dispensation from the revenue 
> to take the wole as a capital sum?
>
> The balance which has to go into an annuity, is a problem.
>
> He thinks it should go to an impaired annuity, he thinks, but not one of 
> those "sales gimmick" ones where all you have to do is smoke 40 fags a day 
> and claim you drink a bottle of whisky. He thinks he could and should get 
> very much better terms.
>
> He can produce documentation and the survival rates for this form of 
> cancer are well known and documented - at about 1 percent at five years. 
> Bill somehow has survived four, but with lots of ops and is now disabled. 
> The situation is reminiscent of a Regency tontine, with him hanging on 
> with enthusiasm.
>
> I think the main question is, "Has he got the pension situation broadly 
> right?"
>
> Are there companies that specialise for annuities in such cases ? Is there 
> a list? Are there any published esimates of figures?
>
> Sorry to present such a dismal case, but Bill is far from depressed about 
> it all, although not anxious to spend his energies fighting off over 
> enthusiastic salesmen and women.
>
> Thanks
> GPG
>
>
>

This seems to me to be a no-brainer. If someone dies before they have turned 
their personal pension pot into an annuity then the whole of the pension 
fund goes to their beneficiaries (normally without an IHT liability). I 
assume this pension is a personal pension, not an occupational one.

I would suggest that he does not take any annuity, impaired life or not. His 
wife can take the pension fund and do what she likes with it - including 
buying an annuity if she wants. If the husband buys one then he's likely to 
die before the full value of what he could have got is paid to him, even 
with guarantees.

Check with Axa (not Axia) that the trust situation of this policy is as it 
should be to enable the beneficiaries to get the fund free of IHT.

If this is an occupational scheme, not a personal one, let me know because 
there may be a better way to do this.

Incidentally, your question has technical errors and incorrect assumptions, 
so I would be careful what you do.

Rob Graham

"Rob graham"  wrote in message 
news:Tf2dnWiZz8bELKvVnZ2dneKdnZydnZ2d@bt.com...
>
> "Pat Gardiner"  wrote in message 
> news:Pq6dnTqCfOLIDq_VnZ2dnUVZ8vSdnZ2d@bt.com...
>> The advice given to me recently on Capitals Gains was so helpful, that I 
>> dare come back again with a different question.
>>
>> I have a friend, who is approaching 65, let's call him "Bill."
>>
>> Bill has a pension payable in September, actually from Axia, who do not 
>> do impaired life annuities. He is waiting for an estimate now of the lump 
>> sum due. His wife is almost exactly the same age. Everyone involved is 
>> determined to refer him back to the original insurance agent, but Bill is 
>> an independent spirit that likes to do his own thing.
>>
>> He is also a dead man walking. His health is terrible and, nobody 
>> including himself, expects him to live more than a few months at best.
>>
>> It is a bad form of cancer, the worst, so there is no mistake. As you can 
>> imagine, he wants to do the best thing for his wife.
>>
>> He hopes to make it to the pension date in late summer. He also wants to 
>> make decisions and sign the papers if he can. He has had long periods in 
>> intensive care and is well aware that he may be alive but unable to do 
>> anything.
>>
>> He understands that he can take a proportion as a lumpsum, but that will 
>> be taxable. It seems sensible to take that and invest it to provide an 
>> income for his wife.
>>
>> Is he broadly  right? Is there any chance of dispensation from the 
>> revenue to take the wole as a capital sum?
>>
>> The balance which has to go into an annuity, is a problem.
>>
>> He thinks it should go to an impaired annuity, he thinks, but not one of 
>> those "sales gimmick" ones where all you have to do is smoke 40 fags a 
>> day and claim you drink a bottle of whisky. He thinks he could and should 
>> get very much better terms.
>>
>> He can produce documentation and the survival rates for this form of 
>> cancer are well known and documented - at about 1 percent at five years. 
>> Bill somehow has survived four, but with lots of ops and is now disabled. 
>> The situation is reminiscent of a Regency tontine, with him hanging on 
>> with enthusiasm.
>>
>> I think the main question is, "Has he got the pension situation broadly 
>> right?"
>>
>> Are there companies that specialise for annuities in such cases ? Is 
>> there a list? Are there any published esimates of figures?
>>
>> Sorry to present such a dismal case, but Bill is far from depressed about 
>> it all, although not anxious to spend his energies fighting off over 
>> enthusiastic salesmen and women.
>>
>> Thanks
>> GPG
>>
>>
>>
>
> This seems to me to be a no-brainer. If someone dies before they have 
> turned their personal pension pot into an annuity then the whole of the 
> pension fund goes to their beneficiaries (normally without an IHT 
> liability). I assume this pension is a personal pension, not an 
> occupational one.
>
> I would suggest that he does not take any annuity, impaired life or not. 
> His wife can take the pension fund and do what she likes with it - 
> including buying an annuity if she wants. If the husband buys one then 
> he's likely to die before the full value of what he could have got is paid 
> to him, even with guarantees.
>
> Check with Axa (not Axia) that the trust situation of this policy is as it 
> should be to enable the beneficiaries to get the fund free of IHT.
>
> If this is an occupational scheme, not a personal one, let me know because 
> there may be a better way to do this.
>
> Incidentally, your question has technical errors and incorrect 
> assumptions, so I would be careful what you do.

It is not Bill's field and he is exercising due caution. I'm sure there are 
technical errors and a wide gap in comprehension. I'm trying to fix that.

Last year, Bill finished up in intensive care, in the middle of selling a 
house, right at the top of the market. Totally zonked, he played up and 
refused to sign the contract. It took the combined efforts of the rest of 
the family to get him to do something he had agreed and wanted.

It is the cause of much family humour now, but not a pantomime to be 
repeated.

He can't remember a thing about it, but fears a repetition and may have to 
get a power of attorney to his wife. He was hoping to have got this sorted 
out in principle, so his wife could act on prearranged agreement. There are 
no family problems or disputes.

It is, according to the documents, an "assigned occupational pension." with 
guaranteed annuity rates.

Bill has made good provision elsewhere for his wife, who incidentally has an 
impaired life with cancer twice although many years ago.

Both are careful and capable with money, but not hot in this field.

They feel they were very badly advised some years ago, as were so many. They 
suspected as much at the time, and feel rather stupid at being talked into 
something they considered risky, so are being extra careful now.

They both favour instinctively National Savings rather than anything else. 
If they can take the cash without penalties and extra tax burdens, that 
seems logical. Is it?

If they do buy any annuities, they would want to know the protection was in 
place in the event of a failure.

Thanks you for your help - all information is very welcome and of course, 
without any responsibility.

GPG





>
> Rob Graham
>

> It is, according to the documents, an "assigned occupational pension." 
> with
> guaranteed annuity rates.

The fact that annuity rates are mentioned seems to indicate that there is an 
actual pension pot, rather than some guaranteed pension based on salary and 
years of service. You should check with Axa what the position is on death - 
does the benficiary get the whole fund? If not, then you need to consider 
transferring the whole fund to a personal pension where this would be the 
case. BTW, how much fund are we talking about? Are there any other pension 
entilement? You may be in a position to look at the tiviality rules if the 
fund is less than £15,000.

> They both favour instinctively National Savings rather than anything else. 
> If they can take the cash without penalties and extra tax burdens, that 
> seems logical. Is it?

Could be!

>
> If they do buy any annuities, they would want to know the protection was 
> in place in the event of a failure.

Failure of what - the annuity provider?

Rob

"Rob graham"  wrote in message 
news:HMqdnUWWgYWjY6vVnZ2dnUVZ8u6dnZ2d@bt.com...
>
>> It is, according to the documents, an "assigned occupational pension." 
>> with
>> guaranteed annuity rates.
>
> The fact that annuity rates are mentioned seems to indicate that there is 
> an actual pension pot, rather than some guaranteed pension based on salary 
> and years of service. You should check with Axa what the position is on 
> death - does the benficiary get the whole fund?

Death before September brings a death benefit to Bill's wife of about the 
same as the total value ie roughly 70K. That would need confirmation and I 
will get him to do that.

>If not, then you need to consider transferring the whole fund to a personal 
>pension where this would be the case. BTW, how much fund are we talking 
>about?

about 70K

>Are there any other pension entilement? You may be in a position to look at 
>the tiviality rules if the fund is less than £15,000.

No.
>
>> They both favour instinctively National Savings rather than anything 
>> else. If they can take the cash without penalties and extra tax burdens, 
>> that seems logical. Is it?
>
> Could be!
>
>>
>> If they do buy any annuities, they would want to know the protection was 
>> in place in the event of a failure.
>
> Failure of what - the annuity provider?

Yes.

The following clauses with AXA seem relevant:

"You have the option of buying your lifetime annunity on the open market. If 
you choose this option your retirement fund will not incur any additional 
penalties"

AXA do not provide impairment annuities

They allow two options a straight pension of about 8K or a lumpsum of about 
18K and a pension of about 6K

 maximum of 25 percent of 70K is tax free

There is a guarantee of a minimum of 5 years payments in any event.

Oddly the documentation sent by AXA recently makes no mention of a spouse

Bill's records show that when he purchased the pension, his wife was to get 
50 percent pension after his death. The illustrations are quite clear BUT 
the policy conflicts and makes it clear that the spouse has no pension.

Interestingly, Bill tells me that this happened before with the same agent. 
That policy (Endowment)did not tie up with what he had agreed and he did not 
spot it. Years later the endowment paid out five years earlier than he 
expected. He tells me he went back found the illustrations compared them 
with the policy and could see the difference. It was chance that it was to 
his advantage as events turned out. Although, I have doubts and think he 
might have done better with the full term he agreed. Water under the bridge.

I can see that he has lost confidence and anything we can do to unravel him 
and point him in the right direction would be a pleasure.

Thanks GPG
>
> Rob
>

"Pat Gardiner"  wrote in message 
news:VqydnQNK4ou5lqrVnZ2dnUVZ8tfinZ2d@bt.com...
>
> "Rob graham"  wrote in message 
> news:HMqdnUWWgYWjY6vVnZ2dnUVZ8u6dnZ2d@bt.com...
>>
Correction:
>
> Bill's records show that when he purchased the pension, his wife was to 
> get 50 percent pension after his death. The illustrations are quite clear 
> BUT the policy conflicts and makes it clear that the spouse has no 
> pension.
>
> Interestingly, Bill tells me that this happened before with the same 
> agent. That policy (Endowment)did not tie up with what he had agreed and 
> he did not spot it. Years later the endowment paid out five years earlier 
> than he expected. He tells me he went back found the illustrations 
> compared them with the policy and could see the difference. It was chance 
> that it was to his advantage as events turned out. Although, I have doubts 
> and think he might have done better with the full term he agreed. Water 
> under the bridge.
>
> I can see that he has lost confidence and anything we can do to unravel 
> him and point him in the right direction would be a pleasure.

I have now found that the policy is more complex and rather badly worded 
IMO,

Bills wife does get a 50 percent pension after Bill's death, but that does 
not apply if he dies before October next.

Then she gets an unspecified lumpsum instead.....looks to be about 70K
>
> Thanks GPG
>>
>> Rob
>>
>
>

"Pat Gardiner"  wrote in message 
news:su-dnRCq4K2uk6rVRVnyvgA@bt.com...
>
> "Pat Gardiner"  wrote in message 
> news:VqydnQNK4ou5lqrVnZ2dnUVZ8tfinZ2d@bt.com...
>>
>> "Rob graham"  wrote in message 
>> news:HMqdnUWWgYWjY6vVnZ2dnUVZ8u6dnZ2d@bt.com...
>>>
> Correction:
>>
>> Bill's records show that when he purchased the pension, his wife was to 
>> get 50 percent pension after his death. The illustrations are quite clear 
>> BUT the policy conflicts and makes it clear that the spouse has no 
>> pension.
>>
>> Interestingly, Bill tells me that this happened before with the same 
>> agent. That policy (Endowment)did not tie up with what he had agreed and 
>> he did not spot it. Years later the endowment paid out five years earlier 
>> than he expected. He tells me he went back found the illustrations 
>> compared them with the policy and could see the difference. It was chance 
>> that it was to his advantage as events turned out. Although, I have 
>> doubts and think he might have done better with the full term he agreed. 
>> Water under the bridge.
>>
>> I can see that he has lost confidence and anything we can do to unravel 
>> him and point him in the right direction would be a pleasure.
>
> I have now found that the policy is more complex and rather badly worded 
> IMO,
>
> Bills wife does get a 50 percent pension after Bill's death, but that does 
> not apply if he dies before October next.
>
> Then she gets an unspecified lumpsum instead.....looks to be about 70K
>>
>> Thanks GPG
>>>
>>> Rob
>>>

It's most unlikely that a spouse's pension was a guaranteed option when Bill 
started the pension. When you buy an annuity you buy that option (at a cost) 
or you don't - your choice.  However, if there's a guaranteed annuity rate 
on offer, this will itself impose certain strictures. But I don't know what 
these are. You'd need to ask Axa.

I'm coming back to my first thoughts. If Bill dies, his beneficiaries get 
all the pension fund, tax free. This must be the best option, although there 
seems to be an issue regarding death before September. I cannot think what 
this would be.

We are a bit short of absolute solid facts, here. The whole project should 
be looked at by an IFA. I can only point you in the right direction.

BTW, why did you post into an accountancy NG? Are you under the impression 
that accountants are pension experts?

"Rob graham"  wrote in message 
news:7eKdnUZn-5qLg6rVnZ2dnUVZ8uWdnZ2d@bt.com...
>
> "Pat Gardiner"  wrote in message 
> news:su-dnRCq4K2uk6rVRVnyvgA@bt.com...
>>
>> "Pat Gardiner"  wrote in message 
>> news:VqydnQNK4ou5lqrVnZ2dnUVZ8tfinZ2d@bt.com...
>>>
>>> "Rob graham"  wrote in message 
>>> news:HMqdnUWWgYWjY6vVnZ2dnUVZ8u6dnZ2d@bt.com...
>>>>
>> Correction:
>>>
>>> Bill's records show that when he purchased the pension, his wife was to 
>>> get 50 percent pension after his death. The illustrations are quite 
>>> clear BUT the policy conflicts and makes it clear that the spouse has no 
>>> pension.
>>>
>>> Interestingly, Bill tells me that this happened before with the same 
>>> agent. That policy (Endowment)did not tie up with what he had agreed and 
>>> he did not spot it. Years later the endowment paid out five years 
>>> earlier than he expected. He tells me he went back found the 
>>> illustrations compared them with the policy and could see the 
>>> difference. It was chance that it was to his advantage as events turned 
>>> out. Although, I have doubts and think he might have done better with 
>>> the full term he agreed. Water under the bridge.
>>>
>>> I can see that he has lost confidence and anything we can do to unravel 
>>> him and point him in the right direction would be a pleasure.
>>
>> I have now found that the policy is more complex and rather badly worded 
>> IMO,
>>
>> Bills wife does get a 50 percent pension after Bill's death, but that 
>> does not apply if he dies before October next.
>>
>> Then she gets an unspecified lumpsum instead.....looks to be about 70K
>>>
>>> Thanks GPG
>>>>
>>>> Rob
>>>>
>
> It's most unlikely that a spouse's pension was a guaranteed option when 
> Bill started the pension. When you buy an annuity you buy that option (at 
> a cost) or you don't - your choice.  However, if there's a guaranteed 
> annuity rate on offer, this will itself impose certain strictures. But I 
> don't know what these are. You'd need to ask Axa.
>
> I'm coming back to my first thoughts. If Bill dies, his beneficiaries get 
> all the pension fund, tax free. This must be the best option, although 
> there seems to be an issue regarding death before September. I cannot 
> think what this would be.
>
> We are a bit short of absolute solid facts, here. The whole project should 
> be looked at by an IFA. I can only point you in the right direction.
>
> BTW, why did you post into an accountancy NG? Are you under the impression 
> that accountants are pension experts?
 Thanks for that.

Yes, I suppose I did think you were experts. I had always been used to 
accountants spreading their wings in the 80s when freedom to advertise came 
etc.

I thought that tax considerations would determine the issue. Bill is also 
housebound now that makes it a bit tough for him, so I thought I could help 
put him on the right road.

You were so helpful over the CGT software, which I have bought, that 
encouraged my approach.

It is a matter for an expert, you are right. I will guide him accordingly.

Thanks Again.

GPG

>> BTW, why did you post into an accountancy NG? Are you under the 
>> impression that accountants are pension experts?
> Thanks for that.
>
> Yes, I suppose I did think you were experts. I had always been used to 
> accountants spreading their wings in the 80s when freedom to advertise 
> came etc.
>
> I thought that tax considerations would determine the issue. Bill is also 
> housebound now that makes it a bit tough for him, so I thought I could 
> help put him on the right road.
>
> You were so helpful over the CGT software, which I have bought, that 
> encouraged my approach.
>
> It is a matter for an expert, you are right. I will guide him accordingly.

The reason I ask is because most accountants are not particularly versed in 
pensions - and I say this with respect. In the 80s and before, people often 
went to their accountants for pensions because this was all bound up with 
their finances. But since the Financial Services and Markets Act which came 
into effect in IIRC 1986 regulation has meant that most accountants do not, 
or cannot, advise on pensions. An accountancy firm may have a department 
that does, but this will have financial advisors in it, not accountants. 
It's a bit like asking your doctor to tell you why your car is misfiring. He 
may be able to but it's not his first skill. In fact this is not all that 
good an analogy because it won't be illegal for a doctor to diagnose your 
car but it will be for an accountant who is not authorised to do so to give 
advice on pensions (or any other matters of this nature, in fact).

BTW, I'm not an accountant. I think your postings about this sort of thing 
are best in the   uk.finance NG.

Rob

"Rob graham"  wrote in message 
news:PN6dnZHpTogoKarVnZ2dnUVZ8qbinZ2d@bt.com...
>>> BTW, why did you post into an accountancy NG? Are you under the 
>>> impression that accountants are pension experts?
>> Thanks for that.
>>
>> Yes, I suppose I did think you were experts. I had always been used to 
>> accountants spreading their wings in the 80s when freedom to advertise 
>> came etc.
>>
>> I thought that tax considerations would determine the issue. Bill is also 
>> housebound now that makes it a bit tough for him, so I thought I could 
>> help put him on the right road.
>>
>> You were so helpful over the CGT software, which I have bought, that 
>> encouraged my approach.
>>
>> It is a matter for an expert, you are right. I will guide him 
>> accordingly.
>
> The reason I ask is because most accountants are not particularly versed 
> in pensions - and I say this with respect. In the 80s and before, people 
> often went to their accountants for pensions because this was all bound up 
> with their finances. But since the Financial Services and Markets Act 
> which came into effect in IIRC 1986 regulation has meant that most 
> accountants do not, or cannot, advise on pensions. An accountancy firm may 
> have a department that does, but this will have financial advisors in it, 
> not accountants. It's a bit like asking your doctor to tell you why your 
> car is misfiring. He may be able to but it's not his first skill. In fact 
> this is not all that good an analogy because it won't be illegal for a 
> doctor to diagnose your car but it will be for an accountant who is not 
> authorised to do so to give advice on pensions (or any other matters of 
> this nature, in fact).
>
> BTW, I'm not an accountant. I think your postings about this sort of thing 
> are best in the   uk.finance NG.

You raise an interesting point, Both myself and Bill were running businesses 
during the period when new freedoms had been granted and there was a lot of 
abuse.

For a period, accountants, solicitors and even barristers were running 
about, trying to figure out what to do and how to be come "entrepreneurs"

At the time, I was travelling several times a week to London, with a group 
involved in a complex legal case. They were discussing their new plans with 
me and picking my brains. They frightened the life out of me. If was not 
that they were deliberately being bad - they were just wild. Way out of 
their depth and reckless

Later within this extended group of professionals, some came badly to grief.

I reported one to his professional association - that was a farce. They 
acted like Mother Theresa to him, cuddled and reassured the rogue. Finally, 
they came to the conclusion that they could not take the case because I had 
not paid the bill in full, so I paid the bill. They then refused to take the 
case because I had paid the bill, thus apparently indicating my full 
satisfaction.

The clot, an accountant, had defied me and closed a company that I owned, 
without consultation because he "thought it for the best." The company was 
legal and solvent with money in the bank. He did it to get even over another 
matter, when I sacked him. I did get it reinstated, but naturally I was 
furious. I could not belive that a serious professional would do such a 
thing, or that his regulators would allow it. He was "reprimanded" in the 
end after a struggle.

Another Barrister, but acting mostly as a solicitor, ravaged the 
countryside, with his colleagues compliance. I was merely one of dozens of 
victims. There were masses of complaints and nothing done. He was eventually 
only dealt with when he stole a small sum from his partners. He finished up 
with a criminal record and was struck off.

I was left with a deep distrust of self-regulation and a tendancy to seek 
advice over a wide area from those with no financial interest. Bill had 
similar experiences.

Anyway, thanks again.

GPG




>
> Rob
>

Pat Gardiner wrote:

> The advice given to me recently on Capitals Gains was so helpful, that I
> dare come back again with a different question.
> 
> I have a friend, who is approaching 65, let's call him "Bill."
> 
> Bill has a pension payable in September, actually from Axia, who do not do
> impaired life annuities. He is waiting for an estimate now of the lump sum
> due. His wife is almost exactly the same age. Everyone involved is
> determined to refer him back to the original insurance agent, but Bill is
> an independent spirit that likes to do his own thing.

Can he get a joint life annuity-no reduction on first death?

The his wife will continue to get the same pension after he dies.

Pat Gardiner wrote:

> I thought that tax considerations would determine the issue. Bill is also
> housebound now that makes it a bit tough for him, so I thought I could
> help put him on the right road.

Having some money to pay tax on is more important here than reducing the tax
bill.

"Jonathan Bryce" <jonathan@localhost.localdomain> wrote in message 
news:Na6dnZAcl8qEk6XVnZ2dnUVZ8tfinZ2d@eclipse.net.uk...
> Pat Gardiner wrote:
>
>> The advice given to me recently on Capitals Gains was so helpful, that I
>> dare come back again with a different question.
>>
>> I have a friend, who is approaching 65, let's call him "Bill."
>>
>> Bill has a pension payable in September, actually from Axia, who do not 
>> do
>> impaired life annuities. He is waiting for an estimate now of the lump 
>> sum
>> due. His wife is almost exactly the same age. Everyone involved is
>> determined to refer him back to the original insurance agent, but Bill is
>> an independent spirit that likes to do his own thing.
>
> Can he get a joint life annuity-no reduction on first death?
>
> The his wife will continue to get the same pension after he dies.

That sounds a good structure. I had not thought of that possibility. I'll 
suggest that Bill puts it to his advisor.

Ta!

GPG

"Pat Gardiner"  wrote in message 
news:c9OdnavkB-5ijaXVnZ2dneKdnZydnZ2d@bt.com...
>
> "Jonathan Bryce" <jonathan@localhost.localdomain> wrote in message 
> news:Na6dnZAcl8qEk6XVnZ2dnUVZ8tfinZ2d@eclipse.net.uk...
>> Pat Gardiner wrote:
>>
>>> The advice given to me recently on Capitals Gains was so helpful, that I
>>> dare come back again with a different question.
>>>
>>> I have a friend, who is approaching 65, let's call him "Bill."
>>>
>>> Bill has a pension payable in September, actually from Axia, who do not 
>>> do
>>> impaired life annuities. He is waiting for an estimate now of the lump 
>>> sum
>>> due. His wife is almost exactly the same age. Everyone involved is
>>> determined to refer him back to the original insurance agent, but Bill 
>>> is
>>> an independent spirit that likes to do his own thing.
>>
>> Can he get a joint life annuity-no reduction on first death?
>>
>> The his wife will continue to get the same pension after he dies.
>
> That sounds a good structure. I had not thought of that possibility. I'll 
> suggest that Bill puts it to his advisor.
>
> Ta!
>
> GPG
>
>

Yeah, but you get a reduced amount from day one. If Bill then dies shortly 
after, you'd have bought a single life annuity at joint life rates. OK, the 
wife will get the same as he does, but he gets a lot less in the first 
place.

Rob

> I was left with a deep distrust of self-regulation and a tendancy to seek 
> advice over a wide area from those with no financial interest. Bill had 
> similar experiences.

By self-regulation, are you referring to accountants and solicitors? Because 
if you include IFAs, they are not self-regulated. The FSA sits on them.

Also, a lot of people say that IFAs only direct the client to the deal 
paying the most commission. Two things - firstly this is a conception and it 
may be true of some but by no means all, and secondly, if you pay the IFA a 
fee then he has no bias, has he? But few people seem to want to pay a fee. 
Would you pay a fee?

Rob

>> "Jonathan Bryce" wrote
>>> Can he get a joint life annuity-no reduction on first death?
>>>
>>> The his wife will continue to get the same pension after he dies.
>>
> "Pat Gardiner" wrote
>> That sounds a good structure. I had not thought of that
>> possibility. I'll suggest that Bill puts it to his advisor.
>
"Rob graham" wrote
> Yeah, but you get a reduced amount from day one. If
> Bill then dies shortly after, you'd have bought a single
> life annuity at joint life rates. OK, the wife will get the
> same as he does, but he gets a lot less in the first place.

A "lot" ?  Really?  Are you sure? ...

I suppose it depends on what you call a "lot"!

"Jonathan Bryce" <jonathan@localhost.localdomain> wrote in message 
news:Na6dnZMcl8okk6XVnZ2dnUVZ8tfinZ2d@eclipse.net.uk...
> Pat Gardiner wrote:
>
>> I thought that tax considerations would determine the issue. Bill is also
>> housebound now that makes it a bit tough for him, so I thought I could
>> help put him on the right road.
>
> Having some money to pay tax on is more important here than reducing the 
> tax
> bill.

Yes, I'll go with that. Being here to pay it also has its attractions ;o)

GPG

"Rob graham"  wrote in message 
news:8aGdnaE4x8nRpqXVRVnyjAA@bt.com...
>> I was left with a deep distrust of self-regulation and a tendancy to seek 
>> advice over a wide area from those with no financial interest. Bill had 
>> similar experiences.
>
> By self-regulation, are you referring to accountants and solicitors?

Yes, I was, but also other professions too.

>Because if you include IFAs, they are not self-regulated. The FSA sits on 
>them.

Does it work?

>
> Also, a lot of people say that IFAs only direct the client to the deal 
> paying the most commission. Two things - firstly this is a conception and 
> it may be true of some but by no means all, and secondly, if you pay the 
> IFA a fee then he has no bias, has he? But few people seem to want to pay 
> a fee. Would you pay a fee?

Yes, I would be prepared to do so, but in a situation where commissions are 
the normal means of remuneration, that is not practical.

GPG


>
> Rob
>

"Rob graham"  wrote in message 
news:e6ydnfcqPOHJp6XVnZ2dnUVZ8qGdnZ2d@bt.com...
>
> "Pat Gardiner"  wrote in message 
> news:c9OdnavkB-5ijaXVnZ2dneKdnZydnZ2d@bt.com...
>>
>> "Jonathan Bryce" <jonathan@localhost.localdomain> wrote in message 
>> news:Na6dnZAcl8qEk6XVnZ2dnUVZ8tfinZ2d@eclipse.net.uk...
>>> Pat Gardiner wrote:
>>>
>>>> The advice given to me recently on Capitals Gains was so helpful, that 
>>>> I
>>>> dare come back again with a different question.
>>>>
>>>> I have a friend, who is approaching 65, let's call him "Bill."
>>>>
>>>> Bill has a pension payable in September, actually from Axia, who do not 
>>>> do
>>>> impaired life annuities. He is waiting for an estimate now of the lump 
>>>> sum
>>>> due. His wife is almost exactly the same age. Everyone involved is
>>>> determined to refer him back to the original insurance agent, but Bill 
>>>> is
>>>> an independent spirit that likes to do his own thing.
>>>
>>> Can he get a joint life annuity-no reduction on first death?
>>>
>>> The his wife will continue to get the same pension after he dies.
>>
>> That sounds a good structure. I had not thought of that possibility. I'll 
>> suggest that Bill puts it to his advisor.
>>
>> Ta!
>>
>> GPG
>>
>>
>
> Yeah, but you get a reduced amount from day one. If Bill then dies shortly 
> after, you'd have bought a single life annuity at joint life rates. OK, 
> the wife will get the same as he does, but he gets a lot less in the first 
> place.

Right, got it. Ta!

GPG
>
> Rob
>

"Pat Gardiner"  wrote in message 
news:NrednRRuE_1L4aXVRVnytQA@bt.com...
>
> "Rob graham"  wrote in message 
> news:8aGdnaE4x8nRpqXVRVnyjAA@bt.com...
>>> I was left with a deep distrust of self-regulation and a tendancy to 
>>> seek advice over a wide area from those with no financial interest. Bill 
>>> had similar experiences.
>>
>> By self-regulation, are you referring to accountants and solicitors?
>
> Yes, I was, but also other professions too.
>
>>Because if you include IFAs, they are not self-regulated. The FSA sits on 
>>them.
>
> Does it work?

Depends on what you mean. But basically, yes it does. Standards have been 
set up and principles established. Not all rogues have been weeded out, of 
course. They never will be. But it's harder for them to operate.

>
>>
>> Also, a lot of people say that IFAs only direct the client to the deal 
>> paying the most commission. Two things - firstly this is a conception and 
>> it may be true of some but by no means all, and secondly, if you pay the 
>> IFA a fee then he has no bias, has he? But few people seem to want to pay 
>> a fee. Would you pay a fee?
>
> Yes, I would be prepared to do so, but in a situation where commissions 
> are the normal means of remuneration, that is not practical.

I think you'll find that a large number of IFAs offer the fee route. You 
simply pay a fee and they refund you the commission. You might win or lose 
on this. I have a sneaking suspicion that you are viewing the current 
advisory scene as if it were still in the 1980s! It's not right to say that 
(a) commission is the normal means of remuneration or (b) it's not practical 
to pay a fee. Things have changed and Queen Victoria has died!

"Rob graham"  wrote in message 
news:DIadnUYGWKn9EaXVnZ2dneKdnZydnZ2d@bt.com...
>
> "Pat Gardiner"  wrote in message 
> news:NrednRRuE_1L4aXVRVnytQA@bt.com...
>>
>> "Rob graham"  wrote in message 
>> news:8aGdnaE4x8nRpqXVRVnyjAA@bt.com...
>>>> I was left with a deep distrust of self-regulation and a tendancy to 
>>>> seek advice over a wide area from those with no financial interest. 
>>>> Bill had similar experiences.
>>>
>>> By self-regulation, are you referring to accountants and solicitors?
>>
>> Yes, I was, but also other professions too.
>>
>>>Because if you include IFAs, they are not self-regulated. The FSA sits on 
>>>them.
>>
>> Does it work?
>
> Depends on what you mean. But basically, yes it does. Standards have been 
> set up and principles established. Not all rogues have been weeded out, of 
> course. They never will be. But it's harder for them to operate.
>
>>
>>>
>>> Also, a lot of people say that IFAs only direct the client to the deal 
>>> paying the most commission. Two things - firstly this is a conception 
>>> and it may be true of some but by no means all, and secondly, if you pay 
>>> the IFA a fee then he has no bias, has he? But few people seem to want 
>>> to pay a fee. Would you pay a fee?
>>
>> Yes, I would be prepared to do so, but in a situation where commissions 
>> are the normal means of remuneration, that is not practical.
>
> I think you'll find that a large number of IFAs offer the fee route. You 
> simply pay a fee and they refund you the commission. You might win or lose 
> on this. I have a sneaking suspicion that you are viewing the current 
> advisory scene as if it were still in the 1980s! It's not right to say 
> that (a) commission is the normal means of remuneration or (b) it's not 
> practical to pay a fee. Things have changed and Queen Victoria has died!
>
<chuckle> You are right, I'm years out of date.  However, I am right too. 
The same things in business happen time and time again in a grand circle.

We allow them to have new names in order to content ourselves that we are 
making progress.

The difficulty with the "fee route" that you outline above, is that the 
commission rate is not the only self-serving influence on the advisor and 
the others are probably more powerful with the better businessmen or women.

I was involved in a number of linked professions. Some had earnings that 
were all fees and above the visible line payable by the client. Others were 
acting as an agent with private commissions from them for sales. This was 
all OK. No ethical problems arose.

Gradually it moved from to cost plus or "what the market will bear" but with 
the appearance of the old system. You had to make an effort to stay clean. 
It was a more complex environment, but even then there was a natural control 
that does not exist with annuities.

These businesses were repeat business areas, where you could expect 
transactions every week, month, quarter or year. If you stepped over the 
line, and were caught, you lost the business. You didn't dare, it was bad 
business to do so. That meant that longevity and ownership of the firm was 
everything. If there were around for a long time under the same management 
and ownership - they were clean.

In a more rapidly moving world with frequent changes in ownership, we don't 
have that rule of thumb anymore.

Perhaps you are right. Things have changed since the passing of the Queen 
and Empress! It is a big frightening world to us old boys.

GPG

"Pat Gardiner"  wrote in message 
news:g6CdnQwUC96Ux6TVnZ2dnUVZ8tSdnZ2d@bt.com...
>
> "Rob graham"  wrote in message 
> news:DIadnUYGWKn9EaXVnZ2dneKdnZydnZ2d@bt.com...
>>
>> "Pat Gardiner"  wrote in message 
>> news:NrednRRuE_1L4aXVRVnytQA@bt.com...
>>>
>>> "Rob graham"  wrote in message 
>>> news:8aGdnaE4x8nRpqXVRVnyjAA@bt.com...
>>>>> I was left with a deep distrust of self-regulation and a tendancy to 
>>>>> seek advice over a wide area from those with no financial interest. 
>>>>> Bill had similar experiences.
>>>>
>>>> By self-regulation, are you referring to accountants and solicitors?
>>>
>>> Yes, I was, but also other professions too.
>>>
>>>>Because if you include IFAs, they are not self-regulated. The FSA sits 
>>>>on them.
>>>
>>> Does it work?
>>
>> Depends on what you mean. But basically, yes it does. Standards have been 
>> set up and principles established. Not all rogues have been weeded out, 
>> of course. They never will be. But it's harder for them to operate.
>>
>>>
>>>>
>>>> Also, a lot of people say that IFAs only direct the client to the deal 
>>>> paying the most commission. Two things - firstly this is a conception 
>>>> and it may be true of some but by no means all, and secondly, if you 
>>>> pay the IFA a fee then he has no bias, has he? But few people seem to 
>>>> want to pay a fee. Would you pay a fee?
>>>
>>> Yes, I would be prepared to do so, but in a situation where commissions 
>>> are the normal means of remuneration, that is not practical.
>>
>> I think you'll find that a large number of IFAs offer the fee route. You 
>> simply pay a fee and they refund you the commission. You might win or 
>> lose on this. I have a sneaking suspicion that you are viewing the 
>> current advisory scene as if it were still in the 1980s! It's not right 
>> to say that (a) commission is the normal means of remuneration or (b) 
>> it's not practical to pay a fee. Things have changed and Queen Victoria 
>> has died!
>>
> <chuckle> You are right, I'm years out of date.  However, I am right too. 
> The same things in business happen time and time again in a grand circle.
>
> We allow them to have new names in order to content ourselves that we are 
> making progress.
>
> The difficulty with the "fee route" that you outline above, is that the 
> commission rate is not the only self-serving influence on the advisor and 
> the others are probably more powerful with the better businessmen or 
> women.
>
> I was involved in a number of linked professions. Some had earnings that 
> were all fees and above the visible line payable by the client. Others 
> were acting as an agent with private commissions from them for sales. This 
> was all OK. No ethical problems arose.
>
> Gradually it moved from to cost plus or "what the market will bear" but 
> with the appearance of the old system. You had to make an effort to stay 
> clean. It was a more complex environment, but even then there was a 
> natural control that does not exist with annuities.
>
> These businesses were repeat business areas, where you could expect 
> transactions every week, month, quarter or year. If you stepped over the 
> line, and were caught, you lost the business. You didn't dare, it was bad 
> business to do so. That meant that longevity and ownership of the firm was 
> everything. If there were around for a long time under the same management 
> and ownership - they were clean.
>
> In a more rapidly moving world with frequent changes in ownership, we 
> don't have that rule of thumb anymore.
>
> Perhaps you are right. Things have changed since the passing of the Queen 
> and Empress! It is a big frightening world to us old boys.
>
> GPG
>

It's interesting to have this exchange and to see why you think like you do. 
Obviously you're very wary of being fouled up again. The problem is to avoid 
throwing the baby out with the bathwater. There's a hobgoblin who tends to 
appear on the uk.finance NG as soon as IFAs are mentioned and jumps up and 
down telling everyone not to touch them with a bargepole. In the same way, I 
would suggest that nobody should touch doctors with a bargepole in case they 
get another Shipman or Palmer or Crippen.

However, I can't see how advisers can get underhand payments from providers 
that aren't seen. The laws are far too onerous to enable this to happen (I 
don't think I'm being naive here.). Providers have far too much to lose if 
they were to be found rewarding advisers beyond what is declared on the 
quotation. Your problem is to know that the adviser knows what he is talking 
about.

But I go back to my first bit of advice. Why not go for the whole fund when 
Bill dies rather than discuss the best sort of annuity when you probably 
don't need to?

Rob

"Rob graham"  wrote in message 
news:04Sdnc8lCZ8dI6TVnZ2dnUVZ8vydnZ2d@bt.com...
>
> "Pat Gardiner"  wrote in message 
> news:g6CdnQwUC96Ux6TVnZ2dnUVZ8tSdnZ2d@bt.com...
>>
>> "Rob graham"  wrote in message 
>> news:DIadnUYGWKn9EaXVnZ2dneKdnZydnZ2d@bt.com...
>>>
>>> "Pat Gardiner"  wrote in message 
>>> news:NrednRRuE_1L4aXVRVnytQA@bt.com...
>>>>
>>>> "Rob graham"  wrote in message 
>>>> news:8aGdnaE4x8nRpqXVRVnyjAA@bt.com...
>>>>>> I was left with a deep distrust of self-regulation and a tendancy to 
>>>>>> seek advice over a wide area from those with no financial interest. 
>>>>>> Bill had similar experiences.
>>>>>
>>>>> By self-regulation, are you referring to accountants and solicitors?
>>>>
>>>> Yes, I was, but also other professions too.
>>>>
>>>>>Because if you include IFAs, they are not self-regulated. The FSA sits 
>>>>>on them.
>>>>
>>>> Does it work?
>>>
>>> Depends on what you mean. But basically, yes it does. Standards have 
>>> been set up and principles established. Not all rogues have been weeded 
>>> out, of course. They never will be. But it's harder for them to operate.
>>>
>>>>
>>>>>
>>>>> Also, a lot of people say that IFAs only direct the client to the deal 
>>>>> paying the most commission. Two things - firstly this is a conception 
>>>>> and it may be true of some but by no means all, and secondly, if you 
>>>>> pay the IFA a fee then he has no bias, has he? But few people seem to 
>>>>> want to pay a fee. Would you pay a fee?
>>>>
>>>> Yes, I would be prepared to do so, but in a situation where commissions 
>>>> are the normal means of remuneration, that is not practical.
>>>
>>> I think you'll find that a large number of IFAs offer the fee route. You 
>>> simply pay a fee and they refund you the commission. You might win or 
>>> lose on this. I have a sneaking suspicion that you are viewing the 
>>> current advisory scene as if it were still in the 1980s! It's not right 
>>> to say that (a) commission is the normal means of remuneration or (b) 
>>> it's not practical to pay a fee. Things have changed and Queen Victoria 
>>> has died!
>>>
>> <chuckle> You are right, I'm years out of date.  However, I am right too. 
>> The same things in business happen time and time again in a grand circle.
>>
>> We allow them to have new names in order to content ourselves that we are 
>> making progress.
>>
>> The difficulty with the "fee route" that you outline above, is that the 
>> commission rate is not the only self-serving influence on the advisor and 
>> the others are probably more powerful with the better businessmen or 
>> women.
>>
>> I was involved in a number of linked professions. Some had earnings that 
>> were all fees and above the visible line payable by the client. Others 
>> were acting as an agent with private commissions from them for sales. 
>> This was all OK. No ethical problems arose.
>>
>> Gradually it moved from to cost plus or "what the market will bear" but 
>> with the appearance of the old system. You had to make an effort to stay 
>> clean. It was a more complex environment, but even then there was a 
>> natural control that does not exist with annuities.
>>
>> These businesses were repeat business areas, where you could expect 
>> transactions every week, month, quarter or year. If you stepped over the 
>> line, and were caught, you lost the business. You didn't dare, it was bad 
>> business to do so. That meant that longevity and ownership of the firm 
>> was everything. If there were around for a long time under the same 
>> management and ownership - they were clean.
>>
>> In a more rapidly moving world with frequent changes in ownership, we 
>> don't have that rule of thumb anymore.
>>
>> Perhaps you are right. Things have changed since the passing of the Queen 
>> and Empress! It is a big frightening world to us old boys.
>>
>> GPG
>>
>
> It's interesting to have this exchange and to see why you think like you 
> do.

Age, Rob. The man who sold the package to Bill was more than a younger 
version.
The older man will always be more cautious

> Obviously you're very wary of being fouled up again. The problem is to 
> avoid throwing the baby out with the bathwater. There's a hobgoblin who 
> tends to appear on the uk.finance NG as soon as IFAs are mentioned and 
> jumps up and down telling everyone not to touch them with a bargepole.

That's not really the problem with me or Bill. Neither of us knew what IFA 
represented until we worked it out. It is the problem with all 
intermediaries, following Thatcher's reforms. There were some unintended 
consequences and we were of an age to see the results.

> In the same way, I would suggest that nobody should touch doctors with a 
> bargepole in case they get another Shipman or Palmer or Crippen.

I think they also have problems with the changes in the health service. The 
idea of publishing their results was only pushed through by filling their 
pockets with gold.
>
> However, I can't see how advisers can get underhand payments from 
> providers that aren't seen. The laws are far too onerous to enable this to 
> happen (I don't think I'm being naive here.).

I expressly did not suggest that: I said "self-serving influence." That can 
encompass a wide range of influences right the way down to fluttering 
eyelids. I once had a partner who, to the hilarity of everyone, would not 
just buy the stationary from the prettiest saleswoman, buy also ply her with 
sherry in the Boardroom

>Providers have far too much to lose if they were to be found rewarding 
>advisers beyond what is declared on the quotation.

That would not have worked with my former partner and the stationary 
saleswomen. How they got out sober always amazed everyone. We had to get 
abigger stationary cupboard.

>Your problem is to know that the adviser knows what he is talking about.

That's true
>
> But I go back to my first bit of advice. Why not go for the whole fund 
> when Bill dies rather than discuss the best sort of annuity when you 
> probably don't need to?

We are coming to that conclusion too, which made this exercise worthwhile. 
Peace of mind, rather than the optimum result, becomes pretty important as 
you get older.

I always used to tell my sales staff, who were on the young side. "You have 
to think like someone with the prejudices of someone a generation older than 
you."

Thanks on behalf of Bill.

I'll keep watching for a while, in case anyone makes some valid points. But 
don't want top clutter up your newsgroups with reminisces that are 
irrelevant.

GPG

>
> Rob
>