Pension Options
Options
Comments
-
No, just read people's posts and understand what they are saying, including xylophones point about what the other pension is; does this primarily pay you a set amount at a certain age or is it always quoted as a sum?
Don't rely on your financial information from the daily mail or similar, do a little research, alternatively just moan about how companies just rip you off because you can't be bothered to do a bit of research.
Assuming you have defined contribution pensions then you would it ally sign up to a product, these products vary and particularly over time, for example any pension prior to osbornes pensions freedom reforms may well not offer immediate access because it wasn't allowed when they were set up.
Lastly the whole point of pensions is that they are tax efficient, so contributions are made before tax or the tax is claimed back. Therefore it's logical that when you take the money it may be subject to tax, it's only taxed the once.
I said earlier that the bigger pension provides a sum of £258 a year. It currently has a value of £10,760.
The documentation also mentions that HMRC limits the amount a person can withdraw without facing a tax charge (£1 million, so I'm ok there) but doesn't mention any figures like 25%. I can take "more than the standard lifetime allowance" but will face a tax charge of 55% if I take a lump sum, or 25% if I use it to buy a regular income.
I know these pensions are trivial amounts so the object is to take as much as possible at once. I won't be retiring in luxury on the monthly amounts stated.0 -
Was this "recently", the state pension scheme changed from April 2016. You really need a current forecast.I've had a pension forecast as I said earlier, I'm due an ordinary single persons pension when/if I retire.
If you have worked and paid NI for most / all of your working life and you havent been in an employer pension for most of this time you should have accumulated additional pension under SERPS / S2P which would increase your State Pension.
So is your "ordinary single persons pension" £122.30, £159.55 or something else?0 -
I said earlier that the bigger pension provides a sum of £258 a year. It currently has a value of £10,760.
The documentation also mentions that HMRC limits the amount a person can withdraw without facing a tax charge (£1 million, so I'm ok there) but doesn't mention any figures like 25%. I can take "more than the standard lifetime allowance" but will face a tax charge of 55% if I take a lump sum, or 25% if I use it to buy a regular income.
I know these pensions are trivial amounts so the object is to take as much as possible at once. I won't be retiring in luxury on the monthly amounts stated.
Nearly 11 grand isn't trivial.
The £1 million amount refers to the lifetime allowance, almost all pension pots will now pay out 25% tax free and the remainder will be taxed as it it was income.
This sounds like a defined benefit, effectively a final salary pensions, which the company are offering as a lump sum. If it were more than £30k you'd have to pay an adviser to approve it but as its lower you should avoid that.
So you'll need to move the pension first, and then take the money out.
You'll need to contact companies to arrange this, virgin or Hargreaves lansdown might be options to make enquiries with. You don't necessarily have to take it all at once, so if you split over two tax years then that might help in reducing any tax liability.0 -
I've had a pension forecast as I said earlier,
I hate to labour the point but do you realise that you come under the new state pension scheme?
https://www.gov.uk/new-state-pension/how-its-calculated
If you have indeed obtained a new state pension forecast, what exactly did it say?0 -
I hate to labour the point but do you realise that you come under the new state pension scheme?
https://www.gov.uk/new-state-pension/how-its-calculated
If you have indeed obtained a new state pension forecast, what exactly did it say?
I'll have to dig the documents out, it was a few years ago. I normally scan everything but can't find the forecast presently.
However, if things have changed recently hence the 'new state pension scheme' you refer to then I'll get a new forecast. I assume I'll only be getting a basic single person's pension anyway whatever that is?0 -
I'll have to dig the documents out, it was a few years ago. I normally scan everything but can't find the forecast presently.
However, if things have changed recently hence the 'new state pension scheme' you refer to then I'll get a new forecast. I assume I'll only be getting a basic single person's pension anyway whatever that is?
Yes, you need to check.
Pension could be anything between nothing and £159 for new pension, could be over £250 under the old rules which are used if they show more pension than under the new rules.0 -
Nearly 11 grand isn't trivial.
The £1 million amount refers to the lifetime allowance, almost all pension pots will now pay out 25% tax free and the remainder will be taxed as it it was income.
This sounds like a defined benefit, effectively a final salary pensions, which the company are offering as a lump sum. If it were more than £30k you'd have to pay an adviser to approve it but as its lower you should avoid that.
So you'll need to move the pension first, and then take the money out.
You'll need to contact companies to arrange this, virgin or Hargreaves lansdown might be options to make enquiries with. You don't necessarily have to take it all at once, so if you split over two tax years then that might help in reducing any tax liability.
As I said earlier it was a 'defined scheme' but was changed to a SHPS later. So I can take 25% and take the rest in two lump sums over two years which will save a bit of tax?
It does mention it can be transferred but why do I need to 'move' the pension anyway?0 -
However, I wish to clarify the position on the two little pensions also.
I have now looked a little further back in your posts.
http://forums.moneysavingexpert.com/showthread.php?p=63535289#post63535289
I've never worked for a company or state industry where a pension came with the job until four years ago where the company run a quite generous pension scheme. They match your monthly contribution which in my case is £109. That is the amount I've paid in since that time. I'm 60 so I realise that this pension would be very modest indeed when drawn.
Two months ago the company decided to change to the new SHPS DC scheme, in fact you could opt out of this but very few did including myself. My previous pension scheme I understand is now ended and exists as a separate entity. I can leave it untouched but have the option to transfer it to the new SHPS scheme.
The original company scheme was not in the SHPS DB (or any other DB) scheme?
It was a DC company scheme?
The SHPS DC scheme became available and you opted to transfer the old DC into the new DC?
You left that company two years ago - naturally company contributions ceased but you had the option to continue to contribute if you wished?
Would it be possible to transfer the "Umbrella" pension to the Aviva policy?
Would you wish to transfer both policies to (say) a SIPP which would give you the flexibility of drawdown?
You say that you intend to continue to work for the foreseeable future - you might wish to continue to contribute to the SIPP?
You might at some stage choose to stop work and live off your state pension and as much of your SIPP as would leave you paying no tax in retirement?
https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf
The above may be worth a read.
You might find an appointment with Pension Wise of assistance.
https://www.pensionwise.gov.uk/en/appointments0 -
I'll have to dig the documents out, it was a few years ago. I normally scan everything but can't find the forecast presently.
However, if things have changed recently hence the 'new state pension scheme' you refer to then I'll get a new forecast. I assume I'll only be getting a basic single person's pension anyway whatever that is?
The reason people are getting a bit insistant that you get a new forecast is that there is no such thing as a "basic single person's pension". The state pension no longer takes account of marital status, and 'basic' has no meaning in this context anymore.
C0 -
However, if things have changed recently hence the 'new state pension scheme' you refer to then I'll get a new forecast. I assume I'll only be getting a basic single person's pension anyway whatever that is?
Not necessarily. And if your forecast is from "a few years ago" get a new one.
This is old https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf
and the figures are out of date but have a look at "Jenny".
At the point of introduction of the new state pension (6.4.2016), it was set at £155.65.
At that point, your entitlement would have been calculated.
It seems that you would have had an amount comprising full old "basic state pension" plus graduated pension plus SERPS plus S2P.
This may have been less than/more than/equal to the new state pension.
0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards