Pension for wife after my death?
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http://www.salford.ac.uk/__data/assets/pdf_file/0006/734046/USS-Member-Guide-2016.pdf
According to the 2016 USS Member Guide page 14 Increases
"These increases are applied to:
§ The benefits from any past membership you
may have built up until 31 March 2016;
§ The benefits you build up in the USS Retirement
Income Builder;
§ The value of pension benefits once in payment;
and
§ The value of your benefits if you leave the
scheme and have a deferred pension.
USS pension increases are reviewed each year and
are linked to increases in official pensions. Official
pensions increases are those paid to retired public
sector employees such as teachers, civil servants
or NHS employees. Currently, the annual increases
to official pensions, usually effective from each April,
are linked to changes in the consumer price index,
which is a measure of inflation over the 12 months
up to each September.
USS will match increases in official pensions for the
first 5%. If official pensions increase by more than
5%, then USS will pay half of the difference up to
a maximum increase of 10%. So, if official pensions
increased by 15% or more, USS increases would
be 10% in that year.
Your pension will not be reduced during periods
of negative inflation."
Additionally, the USS pension increases are used
to increase the salary threshold."
The amount of the widow's pension will be half of (your pension at commencement plus the increases paid after commencement up to date of death)
Page 19
"Death after retirement
The scheme will pay a pension to your spouse or
partner of half the pension you were entitled to as
standard when you retired, plus increases to date
of your death. This pension refers only to the USS
Retirement Income Builder and will be the pension
worked out each year based on your salary subject
to the salary threshold. Any remaining funds
under the USS Investment Builder would provide
additional benefits."
This widow's pension is still a USS pension and therefore increases in payment as on P14?
You should check with the administrator.0 -
I believe USS AVCs can still be lumped together with the DB benefits so that you can take 25% of the combined value as tax free cash from the AVC? In that case, and subject to any LTA considerations, my starting point would be:
- Pay AVC's to claw back some or all of your child benefit.
- Pay voluntary NICs for Mrs Moneyer once Moneyer Minor is too old for her to get them automatically so that she gets full state pension
- continue paying her voluntary NICS until she reaches 35 years
- pay / continue paying £2,880 a year into a pension for her (if this rule is still in existence)
- defer her state pension until it plus the inherited DB would give her a comfortable income.
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I don't wish to sound harsh, but if she's educated to post-grad level, why won't she be seeking "proper" work, rather than voluntary? That seems like a waste of education and earning potential, not to mention building up NI/pension of her own......Gettin' There, Wherever There is......
I have a dodgy "i" key, so ignore spelling errors due to "i" issues, ...I blame Apple0 -
Does USS still offer "allocation" whereby you can choose to sacrifice some of your pension so that her widow's pension is bigger? It may depend on the different sections of the scheme; is part of your pension going to be from the Final Salary section?Free the dunston one next time too.0
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Yes, that's one of the two main options under consideration. The point is that the objective is not to boost pension income in my lifetime (which should be fine anyway) but to boost income between my death and hers: I want to ensure her financial security even if she survives me by 30 years or more. So the questions are (i) what kind of pension fund I should contribute to myself in order to boost income after my death but before hers and (ii) whether doing this is better value than taking the tax hit now and using the net income to buy her NI stamps to maximise her state pension.
So, what you need to do is many fold.
First answer questions. Why do you think she will not get a SP of her own? How many years has she worked and paid nics? Will she get credit for the 3 extra years from 16-18? Possibly. She needs to get a statement of contributions.
Second, why voluntary work over paid work? If you are worried about her financial situation, you should discuss her working for a salary over for free.
3rd, have you considered paying into a private pension for her? She can pay in up to 2880 per year, which the govt gives TR on (even though she doesnt pay tax) to make it 3600. Do that for a few decades, and she has a decent pension pot. Even if she doesnt go back to work.0 -
she won't reach 10 years of contributions before the youngest child turns 12Buying some years of contributions for her sounds like a good plan, but I wasn't sure how the benefits compare with paying into a personal pension: I have an effective marginal tax rate of about 64% due to high-income child benefit charge, so anything that can be done from my gross income is obviously attractive!0
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I don't wish to sound harsh, but if she's educated to post-grad level, why won't she be seeking "proper" work, rather than voluntary? That seems like a waste of education and earning potential, not to mention building up NI/pension of her own
Entirely fair question, and on this forum was always going to be asked by somebody. ;-)
But when it comes to earning potential, I'm lucky enough to have a secure job I love which pays enough to support the lifestyle we want (which is quite frugal), provide for our futures and get the kids off to a decent start in life. Accumulating more money is less important to us than enjoying life and having a positive impact on the world.
Getting back into paid work would be a hard slog (few employers are interested in people with high-level qualifications from 15 years ago and no recent workplace experience) and she'd probably end up settling for something she didn't really enjoy and that didn't use her full skill set anyway. Voluntary work allows her to do what she enjoys most and believes make a positive difference, and also take off as much time as she wants to support the rest of the family.
As for a waste of education, there's plenty of highly skilled work in the voluntary sector (and highly skilled people choosing to do it). I'm afraid we also cling to the old-fashioned view that education has a deeper purpose and benefit than just as training for employment. ;-)0 -
But when it comes to earning potential, I'm lucky enough to have a secure job I love which pays enough to support the lifestyle we want (which is quite frugal), provide for our futures and get the kids off to a decent start in life. Accumulating more money is less important to us than enjoying life and having a positive impact on the world.
I guess the problem is, you are not providing for her future to the extent that you would like to. So your whole approach, as lovely a s it sounds, needs a bit of a rethink.
And many charities and voluntary organisations do have paid positions. She could at least look.0 -
I guess the problem is, you are not providing for her future to the extent that you would like to. So your whole approach, as lovely a s it sounds, needs a bit of a rethink.
I take the point, but when I say my income is sufficient, I mean there's enough headroom in it that I can provide properly for her future. The problem is not lack of resource: it is just that the structure of my current pension arrangements doesn't adequately cover one scenario (namely me predeceasing her by a significant time), so how to efficiently invest a bit more surplus income (which we can easily afford) to insure against this case.0 -
One of the features of the site is that many cannot resist the urge to query what people are trying to do (often for very good reason) which is not often appreciated, however, it usually in an effort to help.
As you have savings and in your position I would be doing this although this is not advice.
Having a life insurance policy which would cover my death in any perceived gap.
Ensuring I paid enough into my pension to ensure I was not a higher rate tax payer using my savings to make up any spending shortfall. A Personal Pension would give you more flexibility when you want to draw funds. You will have to ensure you do not go over any Government limits on contributions or size of pension pot.
Ensure that your wife was investing all her wages into a pension. In your case that would be £2880 but as she will be able to have an income of circa £16k from a pension it may be you have scope to add to this if she ever took paid employment. She could be taking this income from 55 at present.
Look at how many years NI contributions she has - which should be over 10 and decide whether it will be worth making more contributions.
You could always divorce her and the pensions could be divided in two, the re-marry - good luck with that one0
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