Yorick wrote: Fri Nov 28, 2025 10:27 pm
There's a couple of things that haven't been mentioned so far...
You need to factor in any inheritance. Not a nice thing to think about, but could change your financial situation a lot
Also equity release. We're doing well as we are now, but in 5 years, we'll be able to grab 70% of the villa value and live here forever, rent free.
That's a huge amount. But we have no kids to leave it to. Just the nephews and nieces who will still do nicely as we'll never be able to spend it all
I disagree. Even though you might be likely to inherit something it's never certain until it's in your bank account. It's all very well Aunty Ethel is leaving you everything, until she dies 25 years later than you'd planned for, which is when you find out about the equity release on the house that she's actually left to the local donkey sanctuary but forgot to tell you.
You have mentioned it before and I disagreed then too.
Yorick wrote: Fri Nov 28, 2025 10:27 pm
There's a couple of things that haven't been mentioned so far...
You need to factor in any inheritance. Not a nice thing to think about, but could change your financial situation a lot
Also equity release. We're doing well as we are now, but in 5 years, we'll be able to grab 70% of the villa value and live here forever, rent free.
That's a huge amount. But we have no kids to leave it to. Just the nephews and nieces who will still do nicely as we'll never be able to spend it all
I disagree. Even though you might be likely to inherit something it's never certain until it's in your bank account. It's all very well Aunty Ethel is leaving you everything, until she dies 25 years later than you'd planned for, which is when you find out about the equity release on the house that she's actually left to the local donkey sanctuary but forgot to tell you.
You have mentioned it before and I disagreed then too.
Yup. My sister and I were supposed to inherit our aunt and uncle's estate on Vancouver Island. But some years after she died he ended up shacked up with some younger woman who, well, fleeced him and we got a suck of the iron tit!
What happens to an annuity when I die?
Annuity payments stop when you die, unless you have chosen to protect your income with a Dependant’s Annuity, Guaranteed Payment Period, or Value Protection (lump sum payment).
So if i took out an annuity of say £500k, then drop dead 18 months later, the £500k is gone ?
weeksy wrote: Wed Jan 14, 2026 2:33 pm
Just wanted to clear something up.
Annuities.
What happens to an annuity when I die?
Annuity payments stop when you die, unless you have chosen to protect your income with a Dependant’s Annuity, Guaranteed Payment Period, or Value Protection (lump sum payment).
So if i took out an annuity of say £500k, then drop dead 18 months later, the £500k is gone ?
That's the usual deal, you're betting you live longer enough to come out on top of the deal. Although you can do a dual-life thing so it continues until the second death. (But the monthly payments received are usually less).
That's my understanding anyway. Haven't given 'em a second thought since interest rates dropped so significantly.
weeksy wrote: Wed Jan 14, 2026 2:33 pm
Just wanted to clear something up.
Annuities.
What happens to an annuity when I die?
Annuity payments stop when you die, unless you have chosen to protect your income with a Dependant’s Annuity, Guaranteed Payment Period, or Value Protection (lump sum payment).
So if i took out an annuity of say £500k, then drop dead 18 months later, the £500k is gone ?
That's the usual deal, you're betting you live longer enough to come out on top of the deal. Although you can do a dual-life thing so it continues until the second death. (But the monthly payments received are usually less).
That's my understanding anyway. Haven't given 'em a second thought since interest rates dropped so significantly.
That's potentially quite a win for the provider !!!! I guess sometimes it's a chunk of a loss... but i'd bet it's working in their favour more than it does against it.
weeksy wrote: Wed Jan 14, 2026 2:33 pm
Just wanted to clear something up.
Annuities.
So if i took out an annuity of say £500k, then drop dead 18 months later, the £500k is gone ?
That's the usual deal, you're betting you live longer enough to come out on top of the deal. Although you can do a dual-life thing so it continues until the second death. (But the monthly payments received are usually less).
That's my understanding anyway. Haven't given 'em a second thought since interest rates dropped so significantly.
That's potentially quite a win for the provider !!!! I guess sometimes it's a chunk of a loss... but i'd bet it's working in their favour more than it does against it.
Swings and roundabouts (same as company pensions). Some they win some they lose. On average they'll generally be ahead and that's the job of the actuaries - to estimate how long people (usually as a cohort) are going to live and what they'll cost.
Ah, here y'go. Depends what options you choose. The more you tilt it in your favour, generally, the lower the monthly income. Some of these options appear to have been invented since I paid any serious attention. eg guaranteed period and value protection.
'When you die, an annuity usually stops paying unless you chose options like a joint-life annuity (pays a survivor), a guarantee period (pays for a set time), or value protection (pays a lump sum if less than invested), otherwise payments go to your estate or a named beneficiary, depending on the specific policy features and rules. If no such provisions exist, the remaining funds might be lost to the insurer. '
Count Steer wrote: Wed Jan 14, 2026 3:30 pm
Ah, here y'go. Depends what options you choose. The more you tilt it in your favour, generally, the lower the monthly income. Some of these options appear to have been invented since I paid any serious attention. eg guaranteed period and value protection.
'When you die, an annuity usually stops paying unless you chose options like a joint-life annuity (pays a survivor), a guarantee period (pays for a set time), or value protection (pays a lump sum if less than invested), otherwise payments go to your estate or a named beneficiary, depending on the specific policy features and rules. If no such provisions exist, the remaining funds might be lost to the insurer. '
Well it's kinda answered some of my questions to myself, which is, that this is a non-starter for me.
Count Steer wrote: Wed Jan 14, 2026 3:30 pm
Ah, here y'go. Depends what options you choose. The more you tilt it in your favour, generally, the lower the monthly income. Some of these options appear to have been invented since I paid any serious attention. eg guaranteed period and value protection.
'When you die, an annuity usually stops paying unless you chose options like a joint-life annuity (pays a survivor), a guarantee period (pays for a set time), or value protection (pays a lump sum if less than invested), otherwise payments go to your estate or a named beneficiary, depending on the specific policy features and rules. If no such provisions exist, the remaining funds might be lost to the insurer. '
Well it's kinda answered some of my questions to myself, which is, that this is a non-starter for me.
I suspect they had to add some of those options once interest rates got so low. They were a complete no-no for a while without them.
The only attraction I can see is you know exactly what's coming in and it's guaranteed (.....unless another Equitable Life happens).
That does potentially change a few ideas.... but not that many in truth... But it's interesting to play with some of the figures.
I think it's more likely i'll start with a Drawdown and depending on work stuff, may move to an annuity for a set time period after that.
I'm a bit of an L&G fan.
It's the 'rate fixed from day 1 to the end' that would put me off an annuity at a time of low interest rates. That and I'd want it indexed to inflation anyway (which I think you can do - at a price). Only selling point for me is, it's guaranteed* so you can plan accordingly.
Yorick wrote: Wed Jan 14, 2026 3:39 pm
Draw down pensions are safest. Take a bit each year and leave the pot to grow.
You still own everything
The number to take is usually 4%. Pot will grow more than that every year, in fact that number could be 12% these days. DOW broke 50,000 today, closed at 50,115.
weeksy wrote: Wed Jan 14, 2026 2:33 pm
Just wanted to clear something up.
Annuities.
So if i took out an annuity of say £500k, then drop dead 18 months later, the £500k is gone ?
That's the usual deal, you're betting you live longer enough to come out on top of the deal. Although you can do a dual-life thing so it continues until the second death. (But the monthly payments received are usually less).
That's my understanding anyway. Haven't given 'em a second thought since interest rates dropped so significantly.
That's potentially quite a win for the provider !!!! I guess sometimes it's a chunk of a loss... but i'd bet it's working in their favour more than it does against it.
It has to average out in their favour. If they couldn’t make a profit, they’d have to stop doing it.
According to the Pensions and Lifetime Savings Association, a comfortable retirement today requires a single person to have an annual income of c£39,500 per year on top of a full state pension, this would require a pension pot of around c£950k.
This income will allow you to do things like take one holiday in the Med per year, spend about £1,500 on clothing per year, go out once a month for a meal, etc.
It's seems like a lot for a pretty basic lifestyle, but that's the numbers being produced.
I genuinely worry about what the future looks like, the numbers above don't seem realistic for a lot of people and I don't see solutions either, except that retirement will only be for the rich, whilst the working class continue to work until they drop.
IccyV2 wrote: Sat Feb 07, 2026 7:51 am
According to the Pensions and Lifetime Savings Association, a comfortable retirement today requires a single person to have an annual income of c£39,500 per year on top of a full state pension, this would require a pension pot of around c£950k.
This income will allow you to do things like take one holiday in the Med per year, spend about £1,500 on clothing per year, go out once a month for a meal, etc.
It's seems like a lot for a pretty basic lifestyle, but that's the numbers being produced.
I genuinely worry about what the future looks like, the numbers above don't seem realistic for a lot of people and I don't see solutions either, except that retirement will only be for the rich, whilst the working class continue to work until they drop.
I'm not quite sure how that works, if we double that for a 2 income family of oatents, they'd need £80k between them? Which in truth is a lot assuming you don't have a mortgage.
But I agree with the rest that only a very select number of people will get there.
The figures for a couple aren't straight multiples though. Things like utility bills, Council Tax don't double. Food bills too. IIRC the figure for a couple was £56k at the time I looked.
It's probably true to say that people need to consider how they'll manage if one dies and the household income drops by a work pension and a state pension. In that situation I'd say that (depending on the 'comfortable' definition) the £39,500 + state pension is fair....and that vast numbers won't have it (and never have had the equivalent tbh).
If the state pension keeps going like a Ponzi scheme as it currently is then even that's not a given in future. Something's got to give.
I'll see if I can root out the table of expected lifestyles vs income needed. It had a range of things like different car types, replacement period, ne s/h, holiday types, hobbies, eating out etc etc.
