Fixed Term Annuities - good option for low risk retirees with interest rate rises?
Anybody given any consideration to using FTAs for lower risk drawdown clients as an alternative to invested FAD?
I've just been playing around with some quotes on Assureweb and for a £100,000 purchase price (nil PCLS) over a 5 year term you can get an level income of £3,857 plus a guaranteed lump sum at the end of £80,715.
If I've got my sums right, that's an IRR of c.5.12%. When I'd done similar exercises in the past the IRRs were c.1%.