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    • Not Me Officer
    • By Not Me Officer 11th Jun 17, 1:30 AM
    • 262Posts
    • 46Thanks
    Not Me Officer
    Parents, pensions & wills
    • #1
    • 11th Jun 17, 1:30 AM
    Parents, pensions & wills 11th Jun 17 at 1:30 AM
    We nearly lost my grandmother recently which i think has triggered my mother to start thinking about wills and planning after death because she's started to talk about it all of a sudden.

    My mother is a widow in her mid 50s. She has no pension, the mortgage is paid off and she has somewhere around £60k-£65k in cash, then there's the house that i would hazard a guess at being £200k

    When my dad was still alive had my mother died first her possessions would've obviously gone to him, but what happens now? There's 3 kids involved including myself, i say kids but we're all adults (i just mean her children). There's no will in place.

    I imagine if her money remains in cash or even if it got wrapped up in a S&S ISA that it would be split 3 ways between her children, but what if it was in a pension? Does the money 'come out' and get split, does it get drip fed, would a will have to be made up? Is it even worth her putting money in a pension at such a late stage or just a S&S ISA? These are all things she's asked lately.
Page 2
    • Keep pedalling
    • By Keep pedalling 11th Jun 17, 10:31 PM
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    Keep pedalling
    I would of course have to get her to use the calculator but it would be hardly worth it wouldn't it?
    £4.35 per week adding up to £226.20 per year so it wouldn't even come close to covering the £733 she'd have to pay out.
    .
    Originally posted by Not Me Officer
    I guess maths is not a strongpoint for you. The payback period is just over 3 years and she could be getting that paid for 20 years or more, so yes it is worth doing, especially as it's indexed linked.

    The only time it would not be worth doing would be if you knew you had less than 3 years to live.
    • Not Me Officer
    • By Not Me Officer 11th Jun 17, 11:14 PM
    • 262 Posts
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    Not Me Officer
    If your mother's been receiving a widows pension for five years and is still only in her mid fifties they may well have to continue to pay out a pension to her for another thirty or forty years - as long as he would have been paying in.
    Originally posted by p00hsticks
    yes that is true but atush said that it has probably been paid out with interest. I take this as him/her saying that the pension has probably been paid out now (his contributions) and more (than what he contributed).
    That may well happen in time but in only the short time that has passed i would highly doubt it. In time is all ifs and maybes. That's all i was saying.

    I guess maths is not a strongpoint for you. The payback period is just over 3 years and she could be getting that paid for 20 years or more, so yes it is worth doing, especially as it's indexed linked.

    The only time it would not be worth doing would be if you knew you had less than 3 years to live.
    Originally posted by Keep pedalling
    Maybe i misunderstood it but i read it...

    she could in the future buy voluntary Class 3 NI contributions at a cost of around £733 a year, and each year bought would add around £4.35 a week to her state pension up to the maximum of £159.55
    Originally posted by p00hsticks
    as saying that she could buy in her missed years at a cost of around £733 a year, so if she's missing 10 years she pays for 10 years at say £733 a year which totals £7330 (providing my maths is ok)

    But each year you pay for only gets you an extra £4.35 per week.

    So you'd never get back what you've had to pay for is how i read it.
    • xylophone
    • By xylophone 11th Jun 17, 11:25 PM
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    xylophone
    It sounds to me that your father was a member of a DB pension scheme (Morrisons possibly?) and your mother is receiving a widow's pension which will be index linked and paid for as long as your mother lives - this could be for another forty years.

    Your father's contributions paid for security for himself and his dependants.

    https://www.usdaw.org.uk/CMSPages/GetFile.aspx?guid=c7ec6ef3-a928-4dc9-ac5d-9effe79ec6b5

    Your mother should check her state pension situation.

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/607128/your-state-pension-explained-apr-2017.pdf
    • greenglide
    • By greenglide 11th Jun 17, 11:26 PM
    • 2,780 Posts
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    greenglide
    £4.35 per week is £234 a year according to my calculator.

    So in three years you would have got back £702 for a one off cost of £733.

    What exactly is wrong with that deal?
    • p00hsticks
    • By p00hsticks 11th Jun 17, 11:58 PM
    • 5,529 Posts
    • 5,071 Thanks
    p00hsticks
    But each year you pay for only gets you an extra £4.35 per week.

    So you'd never get back what you've had to pay for is how i read it.
    Originally posted by Not Me Officer

    That's an extra £4.35 a week for the rest of your life for a one off payment of around £733 - you only have to live for just over three years after state pension age to get your money back, and after that you are quids in.

    But I think the point is moot anyhow, as if your mother is getting ESA and/or DLA, the chances are that she will have enough credits to qualify for a full state pension anyhow (but get her to check to make sure).
    • LHW99
    • By LHW99 12th Jun 17, 9:01 AM
    • 828 Posts
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    LHW99
    If she had child benefit paid to her at any point between 1978 and 2010, she may also have been given credits for that, even if she didn't get them for other reasons.
    There is information on that here
    https://www.gov.uk/home-responsibilities-protection-hrp/overview

    Important therefore to help her check her record. If online isn't an option, you could help her to phone, and they will send a written version.
    • Mojisola
    • By Mojisola 12th Jun 17, 9:14 AM
    • 27,976 Posts
    • 71,128 Thanks
    Mojisola
    yes that is true but atush said that it has probably been paid out with interest. I take this as him/her saying that the pension has probably been paid out now (his contributions) and more (than what he contributed).

    Maybe i misunderstood it but i read it...

    as saying that she could buy in her missed years at a cost of around £733 a year
    Originally posted by Not Me Officer
    The pension payments that your mother is getting now are from a work pension your father paid into.

    The 'missed years' would be to top up her own State Pension.
    • Neasy
    • By Neasy 12th Jun 17, 11:26 AM
    • 63 Posts
    • 71 Thanks
    Neasy
    I think your Mum needs to:
    • Check her National Insurance record as explained above
    • List the employer(s) she herself has worked for in the past and check whether she has any deferred pension
    • Make a will
    • Sort out Powers of Attorney - naming people whom she trusts and are competent to look after her welfare

    I appreciate that you're reluctant to post too much information on a public forum but personally I don't think posting the name of a particular employer exposes you too much, and there's an absolute wealth of information and help to be found here - if you tell the forum who your Dad's employer was, and potentially also your Mum's, I'm confident that people will help you to locate sources of further information.

    Do you think your Mum might benefit from joining the forum herself? She might enjoy it! People are very friendly and helpful.
    • atush
    • By atush 12th Jun 17, 12:47 PM
    • 16,155 Posts
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    atush
    While i accept that and agree, if i could have the option to go one way and have that happen or go another and have it not happen then so long as there's zero difference to the money i receive in retirement (since like you said that's what it's for) then obviously i would go the way of making sure it could pass on.
    Originally posted by Not Me Officer
    So make sure your pension is a DC pension then?
    • Not Me Officer
    • By Not Me Officer 12th Jun 17, 9:27 PM
    • 262 Posts
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    Not Me Officer
    Your father's contributions paid for security for himself and his dependants.
    Originally posted by xylophone
    That rings a bell because my sister also got a monthly pay out while she was at college. She's a tad older than my brother but he didn't get anything from it because he went straight into work after leaving school at 16 unlike my sister.

    I've passed the information on to my mother. Thanks to all. She'll be looking into it.

    Oh and it wasn't a supermarket

    £4.35 per week is £234 a year according to my calculator.

    So in three years you would have got back £702 for a one off cost of £733.

    What exactly is wrong with that deal?
    Originally posted by greenglide
    no offence but i already explained where the confusion was on my part.

    post #22.

    If she had child benefit paid to her at any point between 1978 and 2010, she may also have been given credits for that, even if she didn't get them for other reasons..
    Originally posted by LHW99
    Thank you. I imagine she will have. She had 3 children born between those dates and all had turned 18 by 2010.
    So make sure your pension is a DC pension then?
    Originally posted by atush
    How do i do that? And is it any better or worse than any other pension?

    You'll have to excuse my ignorance but a pension is a pension to me. I know that isn't the case. I've heard these terms DB and now DC. I'll just be going online & likely to Cavendish Online and paying into a SIPP. No idea what Dx that makes mine.
    • atush
    • By atush 12th Jun 17, 10:04 PM
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    atush
    How do i do that? And is it any better or worse than any other pension?
    What type of pension do you have now? Who do you work for?

    Is it based on how many years you work someplace and your salary (DB), or is there a pot of money that you and your employer pay into and you get annual statements (DC).

    The first type sounds like what your dad had- you get a certain % of your salary paid to you in retirement, and if you die there are dependents pensions paid- there is no pot of money. When your mother dies, her part of your dads pension will cease.

    The second is where you and your employer pay in and there is a pot of money. This money can be used to live on when you retire, but any left over can be left to your wife, children etc. If you die before age 75, it is paid to your nominated party tax free outside your estate (so not subject to IHT) but is taxed as income when it is drawn by them if you die after 75.
    • AnotherJoe
    • By AnotherJoe 12th Jun 17, 10:54 PM
    • 7,052 Posts
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    AnotherJoe
    While i accept that and agree, if i could have the option to go one way and have that happen or go another and have it not happen then so long as there's zero difference to the money i receive in retirement (since like you said that's what it's for) then obviously i would go the way of making sure it could pass on.
    Originally posted by Not Me Officer
    Well, there obviously wont be zero difference, if it was that easy who would take the option of not passing it on? Yes, perhaps your dad got less than he paid in but there will be someone else who lives until they are 100 and gets 10x. It evens out.

    If you want the security of long term payouts without worrying about stock market headlines, then you'll have to accept that there is a lower annual payout and you may lose the ability to pass it on, or if you want a higher payout and leave your money to your descendants*, accept that there is a risk that markets may crash and you may lose out. Your choice. There are ways to mix and match between the two extremes of course.


    * they shouldn't be dependents by the time you die unless you are very unlucky or very active in your dotage
    • xylophone
    • By xylophone 13th Jun 17, 8:12 AM
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    xylophone
    And is it any better or worse than any other pension?
    See https://www.moneyadviceservice.org.uk/en/articles/defined-benefit-schemes
    • Not Me Officer
    • By Not Me Officer 13th Jun 17, 7:01 PM
    • 262 Posts
    • 46 Thanks
    Not Me Officer
    What type of pension do you have now? Who do you work for?

    Is it based on how many years you work someplace and your salary (DB), or is there a pot of money that you and your employer pay into and you get annual statements (DC).
    Originally posted by atush
    My workplace pension will be small compared to the one i will take out privately (with a company like Cavendish Online or similar) but with that i pay in a percentage as does my employer and i can log in and see the pot total (which isn't gaining much in terms of %).

    The private one i'll be taking out through a company like i just mentioned will be whatever they provide i guess.
    • atush
    • By atush 13th Jun 17, 9:16 PM
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    atush
    but with that i pay in a percentage as does my employer and i can log in and see the pot total (which isn't gaining much in terms of %).
    Ok, well our pensions have done well last year. so you might like to investigate what you have chosen to invest in within your pension (as it seems to be a DC pension). Compare the percent yours went up (stripping out any new recent investment in) with the relevant benchmark index.

    And check the charges. Employers pensions usually have very good charging structure. unless they are the default NEST type.
    • Not Me Officer
    • By Not Me Officer 13th Jun 17, 9:38 PM
    • 262 Posts
    • 46 Thanks
    Not Me Officer
    Ok, well our pensions have done well last year. so you might like to investigate what you have chosen to invest in within your pension (as it seems to be a DC pension). Compare the percent yours went up (stripping out any new recent investment in) with the relevant benchmark index.

    And check the charges. Employers pensions usually have very good charging structure. unless they are the default NEST type.
    Originally posted by atush
    Unfortunately i can't really check what i'm investing in as i'm with Now Pensions. I've asked and it seems pretty secretive in that they don't really answer with anything specific. Unlike NEST there appears no option to change it so i invest in something riskier (or even other options).

    http://www.nowpensions.com/wp-content/uploads/2016/02/Auto-enrolment-costs-and-charges.pdf charges on page 6.
    • cloud_dog
    • By cloud_dog 13th Jun 17, 11:42 PM
    • 3,101 Posts
    • 1,677 Thanks
    cloud_dog
    Unfortunately i can't really check what i'm investing in as i'm with Now Pensions. I've asked and it seems pretty secretive in that they don't really answer with anything specific. Unlike NEST there appears no option to change it so i invest in something riskier (or even other options).

    http://www.nowpensions.com/wp-content/uploads/2016/02/Auto-enrolment-costs-and-charges.pdf charges on page 6.
    Originally posted by Not Me Officer
    Their website provide investment strategy and quarterly fund fact sheets.

    I assume you know which investment option you chose?
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • Not Me Officer
    • By Not Me Officer 14th Jun 17, 7:50 PM
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    Not Me Officer
    Their website provide investment strategy and quarterly fund fact sheets.

    I assume you know which investment option you chose?
    Originally posted by cloud_dog
    You know what i've never seen that link. I've asked them, emailed them, got payroll at work to contact them to find what exactly my money is in and the response was a very wishy washy "our aim is to....". No i don't want to know your aim, i want an answer!
    Only last month i asked them about paying in a lump sum to my pension as there isn't an option on their website. The woman on the phone said it can't be done but their website said it can so i wrote to them and laid out specifically that i want to pay in just a cash lump sum.
    Their response was about transferring in from another pension.
    I'm thinking do these people even listen to what is being asked?

    Anyway there was no choice so i chose nothing. I got told i was being enrolled, money came out of my wage and that was that. I only registered to their site because i wanted to but there's no choice options.
    • atush
    • By atush 14th Jun 17, 9:24 PM
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    atush
    Contact pensionwise, or file a complaint.

    You should be given answers to such basic questions.
    • Malthusian
    • By Malthusian 15th Jun 17, 3:04 PM
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    Malthusian
    Contact pensionwise, or file a complaint.
    Originally posted by atush
    Because they misinterpreted the OP's question to be about a transfer in rather than a cash lump sum? It's a free country but why waste even more time?

    If the OP's mother is in her mid 50s then unless she was extraordinarily precocious the OP is too young to be eligible to receive guidance from Pensionwise.

    Most people savvy enough to want to put a cash lump sum in a NOW Pension would be savvy enough not to do it. They would open their own pension plan. NOW Pensions is the pension equivalent of the works canteen, if you want very basic service for a hundred employees at the lowest possible price it does a decent job. If you go in there expecting personalised service or something out of the ordinary you are in the wrong place.
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