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Disappointment with section226 pension scheme
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cog_2
Posts: 6 Forumite
I am 55 and have been contributing to Sec226 Norwich Union Pension Scheme for about 20yrs.
I have not received any bonus for 3yrs now, upto Aprill this year Govt legislation prohibited me from joining another scheme at the same time.
What would be my best plan of action now to provide myself with some additional income when I retire say in 5 or even 10yrs.
I feel very let down with the whole scheme.
Any suggestions.
I have not received any bonus for 3yrs now, upto Aprill this year Govt legislation prohibited me from joining another scheme at the same time.
What would be my best plan of action now to provide myself with some additional income when I retire say in 5 or even 10yrs.
I feel very let down with the whole scheme.
Any suggestions.
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Comments
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upto Aprill this year Govt legislation prohibited me from joining another scheme at the same time.
You have been able to transfer S226 plans into personal pensions for years.What would be my best plan of action now to provide myself with some additional income when I retire say in 5 or even 10yrs.
I feel very let down with the whole scheme.
A lot of the old NU 226s have guaranteed annuity rates (GAR) which is why they are now getting zero bonus. What are the GARs on your plan?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
My pension was taken out in 1985 and a capital sum of £22687.00 with compound bonus was guaranteed to purchase an annuity either at that guaranteed rate at the benefit date or on the Society's then current annuity rates whichever shall provide the greater annuity.0
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Hi cog
What guaranteed rate are you entitled to?Trying to keep it simple...
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My fund currently stands at £45,000 and at age 60 would receive £9.50 for every £1000
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cog wrote:My fund currently stands at £45,000 and at age 60 would receive £9.50 for every £100
Gosh, lucky you.
You will receive a 9.5% return on your money so even if your fund doesn't go up at all before you are 60, you will receive a guaranteed income of 4,275 p.a.
That's 51% higher that what you could buy on the open market: at current annuity rates a 60 year old man would only get 2,835 p.a for a fund of 45k.
Make sure you claim that guaranteed income as soon as it's available ( don't delay, some insurers strictly enforce the timing as these policies cost 'em) and don't do anything to the policy before then.
If you are a basic rate taxpayer, to accumulate a new fund for extra income I suggest you open a mini or maxi investment ISA with a discount broker and then invest in some good quality funds. Income from this ISA pot would not be taxable after retirement - assuming you will receive the full basic state pension , this NU pension will put you into the tax net, so aim for additional income to be tax protected.Trying to keep it simple...0 -
cog wrote:My fund currently stands at £45,000 and at age 60 would receive £9.50 for every £100
and you are disappointed with that?
With an annuity rate 50% above what you can get on the open market (smoker and ill health excluded) you would need double the investment fund in the remaining term just to remain where you are.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Thank you both for this, it is somewhat reassuring.
However the real sting in the tail is missing out on Royal Mail FS scheme,when legislation changed I was out of the time limits to join as I had worked there just 5yrs and a few months and also I am now 55. I will be entitled to a small Civil Service pension of £675 yearly when I retire, I don't suppose there is any way I can improve on this is there?
I will investigate what you say particularly as I have now the opportunity to work full time and I want to make the best use of extra income.
Suddenly time seems to catch up with you and in terms of Retirement income seems to be running out!
If you have any further suggestions on maximising I would be most interested.0 -
Have you checked on your 2 state pensions?
Get a forecast here
Note that the Govt plans to change the law soon so that you will only need to have 30 years' contributions to get the basic. SERPS/S2P is on top of that and if you have a full record and have mostly been contracted in, you could get quite a lot now with that - more than 10k for the two pensions together.Trying to keep it simple...0 -
I have just requested a Pin no for my Pension forecast so I will look into that asap. I am truly surprised that state pension could pay as much as that!!
Thank you , I feel much better than I did about my situation.
In terms of capital growth then, mini or maxi investment isas would be a good option? How do I find a discount broker?0 -
In terms of capital growth then, mini or maxi investment isas would be a good option? How do I find a discount broker?
https://www.hargreaveslansdown.co.uk
https://www.chartwell-investment.co.uk
https://www.bestinvest.co.uk
https://www.cavendishonline.co.uk
Find the best funds here rated by category:
https://www.citywire.co.uk/Funds/Home.aspx
Most people of your age will tend to go for a lower risk mix : Equity Income funds for shares, Property funds, perhaps a bit in something sexier like Special Situations funds or Commodities funds, or a bit in something more staid like corporate bond/gilts funds.
If you fancy investing in shares, let us know, different suggestions apply.Trying to keep it simple...0
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