NEVER THOUGHT I'D REACH PENSION AGE - I'm confused and scared !

Cook_County

kindofagilr wrote: »

Opting out of SERPS is the best thing to do to be honest.

You get more money a week if you have a private pension and some Additional Pension than if you just had Additional Pension (SERPS)

On what grounds do you suggest opting out of S2P is still best for someone of this age? This is not typical advice specially with fund values and annuity rates falling?

dunstonh

Cook_County wrote: »

On what grounds do you suggest opting out of S2P is still best for someone of this age? This is not typical advice specially with fund values and annuity rates falling?

If it was under advice, it would be an upheld complaint waiting to happen.

EdInvestor

kindofagilr wrote: »

You get more money a week if you have a private pension and some Additional Pension than if you just had Additional Pension (SERPS)

That may be the case for some people who have already retired.But for many people retiring in the future the reverse will be the case, especially if they remained opted out into zombie type pensions throughout the past decade.

kindofagilr

EdInvestor wrote: »

That may be the case for some people who have already retired.But for many people retiring in the future the reverse will be the case, especially if they remained opted out into zombie type pensions throughout the past decade.

I dont see how?

I totally am not majorly clued up on private pensions lol

But I know I am better contracting out. I find it really hard to explain it lol sorry.

cyclonebri1

Also you should get a further pension from what you paid in to the 2nd state pension before you opted out, the earnings related bit, and also at your age you may well have contributed to the predecessor of that, can't recall what it was called.

The pension forcast will reveal all;)

Pssst

Pensions can be confusing and I'm not going to be the one to clarify as I'm not much wiser !

You will find that the state will supply you with benefits/credits as your income is so low.
This is what will happen for most people who dont have a decent pension arrangement.


Those who do have a decent pension arrangement will probably find they will get taxed on it,have to pay full council tax and all the other stuff.

I wonder what the point is of paying into a pension scheme then since most of the very good ones have now shut down or are in deficit and under threat?

dunstonh

You will find that the state will supply you with benefits/credits as your income is so low.

The basic state pension is £4700 if you qualify for it in full. The pension credit (which is what you are referring to) is for those with an income of less than £6900 a year for a single person. So, your income has to be very low to qualify.

I wonder what the point is of paying into a pension scheme then since most of the very good ones have now shut down or are in deficit and under threat?

Thats a very "Daily Mail" sort of response. Not what I expect from you.

What has happened is that the ones that were costing employers the most and/or the ones that didnt take much from the employer have gone or are going. However, when it comes to money purchase schemes (which is the most common type now) they still give the highest income in retirement out of all the conventional investment types offered. The problem is that the contributions have to be more realistic than most people seem to be paying.

EdInvestor

kindofagilr wrote: »

I dont see how?

Because the size of the fund will be small as the sombie (with profits)pensions have shown little growth, and the annuity rate will be much lower than it was 10 years ago.

But I know I am better contracting out.

How do you know?Do you have any idea of the amount of S2P state pension you would get if you were not contracted out?How does it compare with the size of the personal pension you are likely to obtain?

It may suit some people to contract out for reasons such as having access to the pension at an earlier stage than the state pension comes due, being able to take tax free cash, etc. But for most people over around 40, contracting out will not be a good idea if you are looking at size of pension income alone.

bendix

dunstonh wrote: »

The basic state pension is £4700 if you qualify for it in full. The pension credit (which is what you are referring to) is for those with an income of less than £6900 a year for a single person. So, your income has to be very low to qualify.



Thats a very "Daily Mail" sort of response. Not what I expect from you.

What has happened is that the ones that were costing employers the most and/or the ones that didnt take much from the employer have gone or are going. However, when it comes to money purchase schemes (which is the most common type now) they still give the highest income in retirement out of all the conventional investment types offered. The problem is that the contributions have to be more realistic than most people seem to be paying.

Precisely. I find it bewildering to read on here so many people seem to be under the illusion that paying in a paltry 40 pounds a month for 30 years seems to lead to people innately believing they will have a huge income in their retirement years, and then howling in outrage when the pittance they will actually get is revealed to them.

It's not rocket science. The more you put in, the more you'll get out.

Simple.

kindofagilr

EdInvestor wrote: »

Because the size of the fund will be small as the sombie (with profits)pensions have shown little growth, and the annuity rate will be much lower than it was 10 years ago.



How do you know?Do you have any idea of the amount of S2P state pension you would get if you were not contracted out?How does it compare with the size of the personal pension you are likely to obtain?

It may suit some people to contract out for reasons such as having access to the pension at an earlier stage than the state pension comes due, being able to take tax free cash, etc. But for most people over around 40, contracting out will not be a good idea if you are looking at size of pension income alone.

Yes I have an idea, I got a State Pension forecast last year, and at todays rates I would be entitled to about £5000 State Pension (this includes Basic Pension and Additional Pension)

And my private pension forecast for 2008 based on 2008's rates gives me a lump sum of £45,000 and a yearly pension of £8000

Or I can not take the lump sum and have a yearly pension of £10,500

So if I took the lump sum I would get £45,000 and £13,000 a year, which is only £3500 less than what I get paid at the minute and I wouldnt have a mortgage to pay.

And I really dont think I would that much if I didnt contract out

So I think I am better off?