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Annuity rates in South Africa

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As a service to those about to retire, I'm starting to do annuity quotes for compulsory money (money that is in a South African retirement fund). I'm mainly using Paramount Life's quotations, as at the time of writing they were the best, and offer the possibility of enhanced annuities (ie if you're suffering from serious ailments, you could potentially get higher annuity rates). If you'd like an annuity quote, please fill in the form below:

It takes a bit of work to do annuity quotes. There is a field below in which you can fill in the commission percentage you're willing to pay, and then I'll quickly let you know if we have a deal.

Risks associate with these products

Some of the risks associated with purchasing annuity products are:

Bankruptcy

When buying an annuity policy you face the risk of the company no longer being able to pay you the annuity payments it owes, if it goes bankrupt.

Administrative competence

Even if the company doesn't go bankrupt you are exposed to its level of administrative competence, in other words its ability to correctly calculate & pay you what it owes you on time.

Erosion of real value of annuity payments

If you buy a level annuity, then the real value of your income will decrease every year at the rate of inflation you're experiencing (if you're experiencing inflation of 5%, then every year you'll be able to buy 5% fewer goods & services, and for example after 10 years will only be able to purchase 61% of the goods you could at the outset).

If you buy an annuity increasing at a fixed rate then you run the risk of the inflation you experience being higher than that fixed rate, and the real amount of good & services you can purchase with your annuity payments decreasing.

Pensioner inflation is generally greater than lagged consumer price inflation, so even if you buy an annuity with inflation protection it will probably increase at a rate lower than the inflation you're experiencing (even with its issues, out of annuity products available in South Africa, those increasing at consumer price inflation provide the closest match to the inflation pensioners are likely to experience).

If you buy an annuity where your increases are linked in some way to the performance of financial markets, then you run the risk of low returns in those financial markets.

Disclosure Requirements

In order to comply with Section 4 of The General Code of Conduct for Authorised Financial Services Providers & Representatives, the following information about our sole product supplier is hereby furnished:

Sanlam Life

Name

Sanlam Life Insurance Limited

Physical Location

2 Strand Road, Bellville, South Africa

Postal address

PO Box 1, Sanlamhof, 7532, South Africa

Telephone

021-947-9111

Contractual relationship

There is no contractual relationship between ourselves & Sanlam Life, and we do not have contractual relationships with other product suppliers. We do have an agreement to provide Sanlam Life annuity quotes, and facilitate the purchase of such annuity policies.

Compliance department

complianceofficer@sanlam.co.za

Complaints department

Online complaints form

We are not aware of the existence of any conditions or restrictions imposed by Sanlam Life Insurance Limited with regard to the types of financial products or services that may be provided by us.

We do not hold more than 10% of Sanlam Life Insurance Limited's shares, or have the equivalent substantial financial interest in Sanlam Life Insurance Limited.

We will initially be receiving 100% of our commission from Sanlam Life Insurance Limited, as we have not yet signed up with other product suppliers.

Paramount Life

Name

Sanlam Life Insurance Limited

Physical Location

26 Augrabies Road, Waterfall Office Park, Midrand, 1685, South Africa

Postal address

PO Box 782421, Sandton, 2146, South Africa

Telephone

086-885-984

Contractual relationship

There is no contractual relationship between ourselves & Paramount Life, and we do not have contractual relationships with other product suppliers.

Compliance department

0861 COMPLY (266759)
compliance@paramountlife.co.za

Complaints department

Online complaints form

We are not aware of the existence of any conditions or restrictions imposed by Paramount Life with regard to the types of financial products or services that may be provided by us.

We do not hold more than 10% of Paramount Life's shares, or have the equivalent substantial financial interest in Paramount Life.

 

In order to comply with Section 5 of The General Code of Conduct for Authorised Financial Services Providers & Representatives, the following information about ourselves is hereby furnished:

Full business & trade names

Cheap Flights South Africa CC
trading as "Free Investment Advice"
trading as "South Africa Travel Online"

Registration number

2010/076688/23

Postal address

PO Box 657, Howard Place, 7450, South Africa

Physical address

17 Elizabeth Avenue, Pinelands, 7405, South Africa

Telephone number

021-531-7453

Cellular phone number

081-492-2026

Internet website

www.freeinvestmentadvice.org

Email address

invest@freeinvestmentadvice.org

Contact person for everything

Rob Baker

We insist clients should never invest in anything they do not understand fully enough to apply their minds and make a decision. It is up to clients to ask sufficient questions to ensure that they fully understand the annuity policies or any other products they invest in, as they'll be fully taking on the responsibility for their decision.

Products which we are authorised to provide in terms of our FSP licence:


Category Description

Advice

Intermediary

CATEGORY I

 

 

Long-Term Insurance : Category B1

X

X

Long-Term Insurance : Category B2

X

X

Retail Pension Benefits

X

X

Pension Funds Benefits (excluding retail)

X

X

Securities and Instruments :Shares

X

X

Securities and Instruments : Money market instruments

X

X

Securities and Instruments : Debentures and securitised debt

X

X

Securities and Instruments : Warrants, certificates and other instruments

X

X

Securities and Instruments : Bonds

X

X

Securities and Instruments : Derivative instruments

X

X

Participatory interests in Collective Investment Schemes

X

X

Deposits Defined in the Banks Act - exceeding 12 months

X

X

Deposits defined in the Banks act - 12 months or less

X

X

We have purchased a small amount of professional indemnity insurance.

Some things to bear in mind

The annuity products listed here are not realisable and once invested the funds concerned are not accessible.

You cannot terminate, withdraw or transfer from these annuity products.

Annuity payments are taxable in your hands.

Transaction requirements

On request, clients must be supplied with a copy or written or printed record of any transaction requirements within a reasonable time.

Sanlam annuity options

Here are 3 of the annuity products Sanlam provides:

Paramount Life Annuity Options

This is obviously a very limited subset of the annuity options which are out there - for instance it leaves out other companies and living annuities. It is up to you, the reader/client to research and decide whether there may be other better options for you.

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