Should I seek prefessional advice?

Katykat

I am thinking of retireing next year, age 57 ( female). I will have an NHS pension which I could take early albeit reduced. I have a small -frozen- personal pension with Standard life, about £400 per year at last count. Dont get State pension until age 62. Hubby still working. Most people are under the impression that NHS pension is V good, I will have 15 yrs membership, but is this correct? Should I just take what I am offered or should I look into annuities, or combining my pensions or what?

dunstonh

Most people are under the impression that NHS pension is V good

It is. However, that doesnt mean it will pay very much. Its just good value for what it costs you.

I will have 15 yrs membership, but is this correct?

15 years isnt going to get you very much I'm afraid. Using the traditional 80ths calculation, it would pay you 15/80ths of your pensionable salary. That is 18.75% of your pensionable salary. Just under 1/5th of what you earn now (not including non pensionable pay).

Should I just take what I am offered

You have limited options and the alternatives wont offer anything better.

Katykat

Thanks, dunstonh, you have confirmed what most think, that I wouldn't get any more if I used the pension fund to buy a different annuity. So I'll keep with NHS pensions.

Katykat

Perhaps someone could also advise me about my small !!!! personal pension too. I have received this years statement today and its even less than I thought. I havn't contributed to it for a long time since I've been in NHS fund, only kept it on because its Standard life & got the shares a couple of yrs ago. I'll put a few figures down.
Current value-£15,471
from payments to replace add state pension £7,920-pension worth £283 PA
from other payments- £8,950 -pension worth £302 PA
final bonus on 31/12/08 -£355.62.
This is assuming retirement date of 2016 for add state pension, & 2013 for rest of plan.
I'm not pension savvy, but I assume that I'll not get this grand sum of £585 PA if I retire in 2010.
No mention of lump sum.
Would I benefit from buying a different annuity? Who should I see to advise

dunstonh

Would I benefit from buying a different annuity? Who should I see to advise

Most pensions provide fairly low qualify annutiies for their own plans. Checking on the open market option is common sense. Especially as its a nil cost option for you. If you take out the one with the pension provider they keep the commission. If you use an IFA, even if the IFA researches and find the existing one is best, the IFA gets paid the commission. If the IFA finds a better deal then you get more income.

Katykat

Dunstonh, am I right in thinking that because the total fund is under £16000, this is why I havn't got the option of a lump sum? If so, is there any way I can resart my contributions to raise the total? I'm less than £600 short. Would this benefit me, as a lump sum would be tax free woldn't it?

EdInvestor

Katykat wrote: »

Dunstonh, am I right in thinking that because the total fund is under £16000, this is why I havn't got the option of a lump sum?

You do have the option of taking 25% tax free cash, they just haven't quoted on it.
Advisedly, you should check other providers of annuities.To give an example, put the figures into the FSA pension annuity charts, which will give you a rough idea of what's available.

What is the official retirement date on your SL pension? If you want to go early they may impose an MVA penalty which might be as much as 25% Check this with them.


www.fsa.gov.uk/tables

Katykat

Thanks guys. I'm going to ask them for a forecast. I'm not sure of the official date. I will be 60 in 2013, but dont get my state pension till 2015. They have detailed 2013 for rest of plan & 2016 for add state pension date. Its all a bit confusing. I thought retirement was when you started to wind down on these things. Seems to me you have to keep on the ball. Oh well, keep drinking the apple juice

dunstonh

Be warned, with the FSA tables, use them only as a very rough guide. They rarely reflect true figures or who is the best. So much so that IFAs do not use them as research because of their inaccuracy. Which leads to the ironic position that the FSA could potentially fine an IFA for using data supplied by the FSA.

Katykat

They'll probably blame global warming