Snorvey wrote:So I asked a well know UK insurer for an example quote for one hundred grand for me and the missus (we're both in our early 50's). 100% spouses annuity, level, and paid monthly.
The rate given was 2.1% annually and all of it is treated as 'capital element' (i.e. tax free). Lucky me.
Your benchmark comparison should be what income you would get if you put the money into the longest Gilt you could find. You wouldn't get 2.1% and it would be taxed.
I doubt there's much of a market in PLAs, so no great incentive for the insurer to take on higher risk by assuming potentially more lucrative investments than Gilts. If you had offered them a pension fund buy out in the hundreds of millions, they might have been a bit more competitive.