Pensions Pensions Pensions......................

Weststander · Jul 8, 2017

dazzer6666 said:
Exactly.......lots of things to consider. For me it wasn't about health (hopefully), more about investment returns (I'm happy to take some risk), flexibility, tax management and being able to leave an inheritance. The DB scheme was good but current very high TVs made the decision easier.

Re fees for the advice, I think a fixed fee is probably fairest - loads of work involved for the IFA, and the amount of the potential pot doesn't really change the volume of work (so a % charge doesn't make sense). Any IFA would have to provide fee details in advance. Most will offer a free initial consultation to explain the options.

Thanks for the info.

Those agreeing to the IFA fee as a % of the funds transfer, face a widely varying array of percentage charges between facilitators/IFA's. Higher charges do not necessarily mean better advice and management.

I think clients should shop around with their own research, before committing with anyone. A larger % charge can have a huge adverse effect on the funds invested and future benefits.

This applies to both the initial charge on the transfer AND future annual management charges for running the SIPP investments.

Herr Tubthumper · Jul 8, 2017

dazzer6666 said:
Whoosh......but probably would in fact. Mostly they're met office staff on a very generous final-salary scheme........a projected pension of less than 10k a year would need a pot of over £300k at todays values.

What is a decent "pot" these days?

Shropshire Seagull · Jul 8, 2017

Lest we forget, there are two fundamentlly different types of pension.
Defined benefit - aka final salary
Defined contribution - aka a pension "pot"

I'm not sure if / how you can take a cash sum out of a final salary scheme as you don't have a set sum of funds as a "pot" of cash.

I have 2 deferred final salary schemes and 3 "pots" [2 deferred] - and no, I'm not going to tell the world they're worth £300k coz I'm too modest .... [an they'e not]

Driver8 · Jul 8, 2017

Shropshire Seagull said:
Lest we forget, there are two fundamentlly different types of pension.
Defined benefit - aka final salary
Defined contribution - aka a pension "pot"

I'm not sure if / how you can take a cash sum out of a final salary scheme as you don't have a set sum of funds as a "pot" of cash.

I have 2 deferred final salary schemes and 3 "pots" [2 deferred] - and no, I'm not going to tell the world they're worth £300k coz I'm too modest .... [an they'e not]

Yes you can take a lump sum from the FS schemes. It will either be a fixed amount based on your length of service or you may have the option to take a higher sum based on 25% of a notional "pot" which is calculated as a multiple of the pension.

As an IFA I would say this but take advice. Transferring or drawing a pension is one of the biggest financial decisions you will ever make so speak to an independent expert first.

dazzer6666 · Jul 8, 2017

Shropshire Seagull said:
Lest we forget, there are two fundamentlly different types of pension.
Defined benefit - aka final salary
Defined contribution - aka a pension "pot"

I'm not sure if / how you can take a cash sum out of a final salary scheme as you don't have a set sum of funds as a "pot" of cash.

I have 2 deferred final salary schemes and 3 "pots" [2 deferred] - and no, I'm not going to tell the world they're worth £300k coz I'm too modest .... [an they'e not]

You absolutely can turn a final salary scheme into a 'pot' (SIPP) to manage yourself or professionally instead but as has been posted many times it's not a decision to take lightly and you have to take professional advice from someone qualified.

The current plan manager will provide you with a transfer value - many are quite keen to get people out of their schemes to reduce the liabilities, and with annuity rates so low, the transfer values are currently very high.

I'm currently 51 and left the final salary scheme I had back in 2000, the current value for me to take a cash sum, put it into a SIPP I can access at 55 BUT forgo the eventual pension was over 30 times the project pension (ie if the projected pension at age 60 - normal retirement age for the scheme - was £10,000, the cash transfer value offered to me would be over £300,000).

Biscuit · Jul 10, 2017

patchamalbion said:
For 55 unfortunately not, although I don't know your salary.

I started at 26 and put 8% and my company contributes 12% and even that may come short of what I wish to achieve by 65!!

That's scary!

Arthritic Toe · Jul 10, 2017

patchamalbion said:
For 55 unfortunately not, although I don't know your salary.

I started at 26 and put 8% and my company contributes 12% and even that may come short of what I wish to achieve by 65!!

Blimey - you ought to be pretty comfortable on that surely? What do you want to achieve - a private island?

Silverhatch · Jul 10, 2017

If you don't "need" a tax free cash sum and you're relying on your pot to provide income into old age (using the most tax efficient draw down strategy), is there any good reason to take the lump sum @55?

Driver8 · Jul 10, 2017

Silverhatch said:
If you don't "need" a tax free cash sum and you're relying on your pot to provide income into old age (using the most tax efficient draw down strategy), is there any good reason to take the lump sum @55?

No. The only risk is that the option is taken away in the future but that's unlikely in my opinion. Using a combination of tax free cash and taxable income is a common way of retirement planning and means you can take £15,300 p.a. tax free if you have no other income.

Beach Hut · Jul 10, 2017

Unfortunately two thirds of my tax-free lump sum will be required to get the kids on the housing market, grrrrrr

dazzer6666 · Jul 10, 2017

Beach Hut said:
Unfortunately two thirds of my tax-free lump sum will be required to get the kids on the housing market, grrrrrr

Ain't that the truth......me too

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Beach Hut · Jul 10, 2017

dazzer6666 said:
Ain't that the truth......me too

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The planned world tour will have to be toned down but thinking of going down under for a month or so when I retire and take in an Ashes test match at the same time

dazzer6666 · Jul 10, 2017

Beach Hut said:
The planned world tour will have to be toned down but thinking of going down under for a month or so when I retire and take in an Ashes test match at the same time

Was discussing the exact same thing with my best man during the rugby at the weekend. We said 30 years ago we'd do an Oz Ashes series when we retired. We're thinking about a Windies Test as a warm up

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Blackadder · Jul 10, 2017

I have an AVC to supplement my works pension when I retire. It's only worth a few thousand. It won't be worth buying an annuity with it.

Can I cash in 25% every year to avoid paying tax on it or is it just a one off?

patchamalbion · Jul 10, 2017

Arthritic Toe said:
Blimey - you ought to be pretty comfortable on that surely? What do you want to achieve - a private island?

You'd be surprised. I'm hoping compound interest will be friend!

http://monevator.com/compound-interest-calculator/
The above is worth looking at if people want to understand what your final pension pot could be worth.

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Pensions Pensions Pensions......................

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