pension advice please

wattapain

Hi, I have just retired from the NHS on 31/12/05 at age 58 ( I'm a midwife - one of the so-called 'special classes' - 'allowed' to retire at55 +). I have a final salary pension of aroun £11.5 k ( I know - sorry guys!! :rolleyes: ).
Not complaining about that (although I HAVE paid 25 years contributions).
My question though is to do with a FSAVC that I've had with CIS since '93.
I spoke to someone re stopping it and was told that as I'm taking my occupational pension, I need to stop the avc and can take it as apension now. I am aware that on01/04/06 it's 'A' day and changes are comingwhich means that 'small' pots of < £15k (mine is - around 13) can be taken as a one off lump sum but only for those > 60.
I want to know whether I can defer this till I reach 60 or do I have to take out an annuity with this (less the 25% Lump sum which I will definitely take).
Sorry if this is a bit garbled but I'm looking to dunstonh for some guidance here please.
also, another factor in this is that I am still working part time on the staff bank - av about 20 hrs a week, so does this make any difference?
Hope you can help,
Terri :rolleyes:

dunstonh

I spoke to someone re stopping it and was told that as I'm taking my occupational pension, I need to stop the avc and can take it as apension now.

No you dont. You have to stop it this tax year (which can be the last day in the tax year) but you do not have to commence it yet. That is the whole point of going with an FSAVC rather than an AVC. I am guessing the person you spoke to wasnt aware that there was a difference.

Anyone with an FSAVC retiring now would do well to consider delaying the FSAVC until the new tax year and under the new regime.

I am aware that on01/04/06 it's 'A' day and changes are comingwhich means that 'small' pots of < £15k (mine is - around 13) can be taken as a one off lump sum but only for those > 60.

Almost didnt spot this. Dont get your hopes up. Trivial ammounts under £15000 of all your pensions. Your occupational pension has a monetary value and given your pension income, you will be well over that £15k.

So, in summary your options are:
1 - take it before 6th April with 100% purchasing an annuity
2 - take it after 6th April with 75% purchasing an annuity with 25% tax free lump sum.

wattapain

Hi Dh, thanks for the reply - sorry it's taken so long for me to get back, lots going on.
So it looks like I'm gonna have to buy an annuity - really p***ed off about that as I think they stink, but 'life's a b***h' & all that.
So noew the next question is - How in God's name do you choose?
I've been trying to find figures, they used to be in the weekend papers - best buys etc, but am at a loss now - any more suggestions/advice from our resident IFA?
Terri

dunstonh

So noew the next question is - How in God's name do you choose?

Its very easy. You always get figures from your exisiting provider and then get an IFA to compare those figures on the open market option. The provider that pays the most generally gets the business.

The main consideration is how you want it paid. i.e. level basis or increasing, if increasing at what rate?, single life or some spouse benefit, and guarantee period, if required.

I usually get quotes on a range of the options and luckily have the software to generate a nice graph showing the crossover points of which option pays the most if you live x number of years. However, as you don't know the date of your death, you are going to make some assumptions on that front

EdInvestor

http://www.annuity-bureau.co.uk/tab/rates_current.aspx

This table will give you a rough idea and the FSA also has a list:

www.fsa.gov.uk/tables

dunstonh

Dont rely on the FSA tables though. They are guidence only and not updated frequently enough.

wattapain

Thanks guys - will look at those tables later.
But do i have to buy an annuity now or can I wait a bit. as i said, I'm only 58 so maybe I'll wait till I'm 60 - only thing is annuity rates are only going 1 way it seems. Hmmmm.
Terri

stillwaters_3

As I am new to your Registry you may not have received my question.
My wife holds a £10,000 Standard Life with profits Bonds.
Since the value has dropped to nearly half its value should I advise her to cash it in (now 5 years old) and replace it with a 5 per cent investment or wait until we are given the pay out due when De-mutualization occurs.
Thanks
stillwaters

EdInvestor

should I advise her to cash it in (now 5 years old) and replace it with a 5 per cent investment or wait until we are given the pay out due when De-mutualization occurs.

I suggest she waits for the DM windfall.In the meantime, can she not withdraw 5% a year without penalty?If so, she should also do that.

What do you mean by " a 5 per cent investment" BTW ?

EdInvestor

wattapain wrote:

Thanks guys - will look at those tables later.
But do i have to buy an annuity now or can I wait a bit. as i said, I'm only 58 so maybe I'll wait till I'm 60 - only thing is annuity rates are only going 1 way it seems. Hmmmm.
Terri

You can, but be careful if the money is invested in a With profits fund. Many of these have MVA penalties, which don't apply at the Normal Retirement Date written on your policy, but apply at all other times.If you defer taking it at the normal NRD, the company might roll it over and pick a new NRD such as aged 75, whereupon you will be subject to a penalty if you take it on any other date if MVA penalties are still around.

So be sure to specificy exactly what the NRD should be changed to.

al_yrpal

wattapain wrote:

Hi, I have just retired from the NHS on 31/12/05 at age 58 ( I'm a midwife - one of the so-called 'special classes' - 'allowed' to retire at55 +). I have a final salary pension of aroun £11.5 k ( I know - sorry guys!! :rolleyes: ).

If you've been in the NHS for 25 years, you deserve every penny. Enjoy your retirement!