Work pension Shock,

[Mike Reed]

Transfer you pot over to me , I will invest it in classic hifi

That would be a potentially potentiometer investment, then; can go higher or lower.

I’m 65 next year and get my employer pensions paid to me then.

Plus the state pension in a couple of years' time, Dec. Just about when you've got everything, too, being a cautious man (with finance, that is).

Anyone who has been retired for over 5 years and still manages to save money will tell you that a decent pension that exceeds your expenditure is the best thing ever.

Anything which exceeds expenditure must be saved in some form and if that form takes a prudent path, the problem becomes where and how to safely and beneficially store this excess you have no immediate need of, esp. regarding tax avoidance now that draconian reductions in cap. gains and fiscal drag on everything else add to the tax burden.

 

[flapland]

Having just looked at some AVC calculators, yes that looks a good shout. Talking with the pension team at work early next year. Still have 4-5 years left depending on if I bail at 62 or 63.

 

[Minio]

Nearly all Public Service pensions had 60 down as the normal retirement age and the Post Office done it for three reasons.

The pension schemes were formulated in the 1960s and back then most Postmen were becoming wrecked at the age of 60. A lot of them had to carry heavy sacks which over the years could cause shoulder pain. It was kind to let them go at 60 so they would get a good pension and possibly take on some lighter job if they so wished.

Also Managers were quite often given generous offers to go at around 55 because the RM wanted young dynamic company men instead of old men stuck in their ways etc. Generally the more senior you were, the younger you got pushed out. I went 5 years early at the age of 55 on an enhanced pension of 39 years and I was quite happy to go on those terms.

Also the RM pension fund had built up massive cash surpluses due to prudent investment and it was happy to pay pensions early. The figures quoted back in the 1970s was that anyone who retired at 65 typically died at 69.5 whilst those who retired at 60 typically died at 71years, therefore they would enjoy a much longer pension.

Yes. The old Royal Mail (good) pension plan has an interesting history.

At my office people were working well past 60 in more recent years.

I for one of them saw no point in pulling, what had become a legacy scheme, a pension while still at work.

Unfortunately their pension help line was manned by an untrained idiot when I asked about deferring payment.

It seems subsequently that you can defer it for as long as you like just like the state pension. Deferred payment should result in a better quote on taking it out.

If the people that run the scheme could have explained that fairly simple fact a lot worry and confusion could have been avoided instead they carried on the old line that it should be taken out ay 60.

 

[Mick P]

Yes. The old Royal Mail (good) pension plan has an interesting history.

At my office people were working well past 60 in more recent years.

I for one of them saw no point in pulling, what had become a legacy scheme, a pension while still at work.

Unfortunately their pension help line was manned by an untrained idiot when I asked about deferring payment.

It seems subsequently that you can defer it for as long as you like just like the state pension. Deferred payment should result in a better quote on taking it out.

If the people that run the scheme could have explained that fairly simple fact a lot worry and confusion could have been avoided instead they carried on the old line that it should be taken out ay 60.

A lot of people in the pension scheme before 2008, took the pension at 60 but still carried on working for RM. A lot of people were almost earning 1.5 times their salary.

 

[Bart]

I thank my lucky stars my wife and I have both benefited from decent final salary pensions for the last ten years or so, now that such good deals don’t seem to be available I worry for today’s youngsters, I’m sure many don’t give their retirement much thought and even if they did knowing what to do and having the funds to do it may be beyond them. I foresee some hard times ahead and much longer working lives.

 

[Mick P]

Yes your children will almost certainly have a lower pension than you and will receive it later in life than you. However you probably have a house worth a relatively high value which you can pass onto them.

 

[Spike]

Hi, received a update on one of my work pensions, i haven't been in it very long, about 4 years,
I have £19,000, in the pot, and i was told that this would accumulate to £40, a month, YES a month, in the next 5 years, when i retire,
My god thats shit, i can get more a week in a ISA, or saving's account, for £20,000, so i'm dragging it out next week and doing so,
i know interest rate's are high at the moment, but,,

By the way my royal mail shares, that i bought a few months ago for £2, are now £2.67,

Is it really worth getting a pension, I know the firm puts in a lot but are these out-dated savings accounts,

Assuming that you will pay in another £20000 (tax free) in the next 5 years that will give over £40000. This would be about £10000 tax free and £170 per month. Remember you have paid this in tax free.

 

[Spike]

I’m currently waiting for my final teachers pension settlement taking into account of the McCloud judgement. Supposed to be due tomorrow.

 

[mjd]

I was very lucky to be offered early retirement from BT when I was 45 after 27 yrs counting towards my pension, I joined as an apprentice at 16, I'm now 73 so I've been drawing my BT pension for longer than I worked for them, and It's index linked. now that's a result !! I'm very glad that I didn't have the option then to take out a lump sum as I know it would be all gone a long time ago.

 

[CHE]

You are auto enrolled into a Workplace Pension scheme, you can’t choose not to be enrolled if you are deemed an eligible employee under the new rules.

If you opt out within the initial 1 month window, you get any contributions returned in full, so effectively you have no pension if that’s your choice. You are not required by law to make any contributions to a Pension.

You are re-assessed/re-enrolled every 3 years, you may be opted in again if the rules dictate. You can opt out within the 1 month window. Rinse Repeat.

You can opt out at any time by writing a letter requesting it but the rules vary according to your Pension Provider as to how they handle it what their T&C are and what you’ll get back cash wise.

More to it but that’s a broad stroke of how the new Workplace Pension Schemes opt in/out work.

Totally correct. Mrs CHE was enrolled a few times in to a WPS for the company she worked for and each time opted out. No money was ever taken in contributions and hence none was ever returned. There is no requirement to be in such a scheme.

No one buys annuities anymore!

I got an annuity a few years back - best deal by far on offer for me, although the reasons were quite complex. So yes, people do still buy annuities.

CHE

 

[Ponty]

I thank my lucky stars my wife and I have both benefited from decent final salary pensions for the last ten years or so, now that such good deals don’t seem to be available I worry for today’s youngsters, I’m sure many don’t give their retirement much thought and even if they did knowing what to do and having the funds to do it may be beyond them. I foresee some hard times ahead and much longer working lives.

A thing of the past now. I’ve never had a sniff of one in 30 years. God help folks now who will still have mortgages upon retirement, let alone decent pension pots. Work til you drop.

 

[Ponty]

I was very lucky to be offered early retirement from BT when I was 45 after 27 yrs counting towards my pension, I joined as an apprentice at 16, I'm now 73 so I've been drawing my BT pension for longer than I worked for them, and It's index linked. now that's a result !! I'm very glad that I didn't have the option then to take out a lump sum as I know it would be all gone a long time ago.

Good luck to you. What you describe is of course the very reason such schemes are no longer. Totally unaffordable and unsustainable.

 

[AudioAl]

I am so please I own my home and NO mortgage , Allways managed to pay my way through lifeand never had a red bill.

 

[molee]

Is it really worth getting a pension, I know the firm puts in a lot but are these out-dated savings accounts,

To offer an answer to the OP's question. It depends. If one is under a certain age and given a) the size of the pensions black hole b) there isn't actually a pot of actual money in a pension but it is, instead, a claim on future generation's productivity. It makes more sense for this group to get politically organised, nationalise all pensions (offering, say, 10p in the £ compensation to a max of £10,000 per year). Thus saving themselves a fortune and start all over again.

If one is over that certain age it makes sense to push the ponzi scheme that is a private pension for all its worth in the hope that the former group a) will continue subsidising those already in payment or b) soon to be so. There is a demographic tipping point coming and there is nothing quite so unscary as an angry pensioner (see the OAPs queuing menacingly outside Nortern Rock in 2008) who no longer forms part of the dominant voting bloc.

 

[Darth Vader]

The OP really needs someone to sit down with him for guidance.

A pension is not savings rather it is investments aimed to accrue a sum from which to draw an income through retirement. Don't be put off by the look of small sums as they all add up.

If that £20K is used to open a SIPP and assuming that the OP is a standard rate tax payer HMRC will top that up to £25K equivalent to 25%! Then that investment has 5 years to grow and thats maybe around £40K. Put into an annuity that may depending on rates at the time yield around £2K pa. However my own preference would be to leave it in the SIPP and let it grow tax free and draw down as required.

Its a complex subject and he needs professional advice.

DV

 

[Spike]

I’m sure if it a work pension then he will have already received tax relief at source so cannot put it in a SIPP and receive further tax relief.

 

[clivem2]

I’m sure if it a work pension then he will have already received tax relief at source so cannot put it in a SIPP and receive further tax relief.

He can though he’d have to pay tax when cashing it in then get the tax back when putting it into a SIPP so it just balances out although it could get complicated at higher tax rates, which drawing the pension out will almost certainly result in. Proper advice is very much needed.

 

[Amber Audio]

You don’t cash in to move a Pension, the procedure involves requesting a CETV - cash equivalence transfer value. You are entitled to request this once every 12 months, if you action the transfer your Pension Fund has to release the funds and transfer it to your new provider within 3 months. There are various reasons you would transfer out of a Final Salary, early access or poor past performance. Definitely do your due diligence as a guaranteed income from such a scheme is not something to ditch on a whim.

There’s a lot of info available online but best bet is ask friends, family, colleagues for a recommendation for a Financial Advisor, they usually offer a free initial meeting so you can test the waters and will likely give you some general idea of what they’d suggest doing and the costs. Watch out for up front charges and ongoing % charges for both the Platform and the Advisor, they can mount up.

 

[clivem2]

You don’t cash in to move a Pension, the procedure involves requesting a CETV - cash equivalence transfer value. You are entitled to request this once every 12 months, if you action the transfer your Pension Fund has to release the funds and transfer it to your new provider within 3 months. There are various reasons you would transfer out of a Final Salary, early access or poor past performance. Definitely do your due diligence as a guaranteed income from such a scheme is not something to ditch on a whim.

There’s a lot of info available online but best bet is ask friends, family, colleagues for a recommendation for a Financial Advisor, they usually offer a free initial meeting so you can test the waters and will likely give you some general idea of what they’d suggest doing and the costs. Watch out for up front charges and ongoing % charges for both the Platform and the Advisor, they can mount up.

Yes, there will be an advice cost to do the transfer as the receiving SIPP should require this - especially for a transfer from a DB scheme.

 

[epo1]

I am currently a pensioner and I put my plans in place in my 30s (yes, sad).

OP should get a contribution statement and an estimate of what their state pension will be, what their work pension will be and make some decisions. It could be worth topping up state pension contributions if you need to and are able, in my situation deferring the state pension was pointless as it takes a really long time for the missed pension payments to be made up after inflation, if you don't need the money just save it away somewhere interest bearing. Don't take a lump sum if you don't have an actual use for it, you might need the extra pension in later years.

Remember tax, my work pension is taxed at source and currently tax (say 20%) is payable above £12.5K. You may get lower monthly payments and be forced to fill in an annual tax return just to get a refund.

But get it sorted, some people glide into retirement, others get slammed by it.