pension advice please

EdInvestor

jem16 wrote: »

The Code of Conduct is for mortgage advisers Ed - neither Dunstonh nor Whiteflag are mortgage advisers so doesn't really apply.

I've posted a link to the sticky that outlines the rules for IFAs which were drawn up after the mortgage advisors were sorted.At the time there was only one IFA posting with a signature - dunstonh - and other IFAs were not making an issue out of it.In any case dunstonh is on record as approving the mortgage advisor proposals so there is no reason why he would object to falling into line with the rules.

Now Whiteflag is creating a regular fuss about dunstonh's status,plus breaking the policy rule on signatures himself.And there are others who are also not posting with signatures but making it clear they are advisors, independent or otherwise, which is not allowed.

Looks to me the time has come to get this situation into order lest we have to put up with constant disruptive threads..

jem16

whiteflag wrote: »

No problem Jem
as already mentioned earlier by using cashflow models you can run the various scenarios and in many circumstances taking the income works out of more benefit to the client.

I think it definitely will depend on the individual's circumstances. If someone was still working or receiving other taxable income taking the income may not be advantageous.

While agree with dh that you pay tax on on the annuity /drawdown income as you draw it you are then building up a fund that will allow you to take tax free income or capital withdrawals in the future.

It depends what you are looking for I feel. If it's a secure retirement income guaranteed for life then the pension annuity is going to suit a lot of people.

That should be considered along with the fact that you are then stripping out pension monies that could be caught by the annuity trap so the sooner you start the more you can get out .

What do you mean by annuity trap exaclty?

IMHO having the money outwith a pension wrapper and all the flexibility that goes with that is worth paying a little more tax in the meantime.

It is a viable alternative for some. However with proper planning earlier perhaps a mixture of both would be best.

Thanks for explaining your viewpoint. To be honest I find it more helpful than your earlier points where you made it clear that you disagreed with Dunstonh but didn't really point out why. Do you not think so?

whiteflag_3

Jem. I think I did give my reason why I disagreed with dh on my op- the cashflow planning. Dh has dismissed that but being as I'm in the blue toon just now will give you fuller reply later when I return south later tonite

jem16

whiteflag wrote: »

Jem. I think I did give my reason why I disagreed with dh on my op- the cashflow planning.

Perhaps it's just me but the jargon of "cashflow planning" doesn't really tell me a lot and I doubt ( although I may be wrong) if it tells the OP much either.

Dh has dismissed that

I dareay he has his reasons and is entitled to his viewpoint too.

but being as I'm in the blue toon just now will give you fuller reply later when I return south later tonite

I think it would be useful and more helpful to everyone.

EdInvestor

whiteflag wrote: »

While agree with dh that you pay tax on on the annuity /drawdown income as you draw it you are then building up a fund that will allow you to take tax free income or capital withdrawals in the future. That should be considered along with the fact that you are then stripping out pension monies that could be caught by the annuity trap so the sooner you start the more you can get out .
IMHO having the money outwith a pension wrapper and all the flexibility that goes with that is worth paying a little more tax in the meantime.

It's an interesting insight to the changes over the last 10 years in the financial industry to see an IFA suggesting that the best thing to do with money in pension funds might be to get it out asap and place it in a better tax wrapper.This was formerly (at least in public) a view which tended to be held by private investors, not by anyone in the financial establishment.

This was because it is in the interest of the pension providers to hang onto the invested funds as long as possible and eventually to confiscate them via the annuity trap - providing easy remuneration for advisors on the way.The conventional wisdom was supported by the Govt and the regulators which didn't want punters extracting their money, blowing it on fun and then queuing up for benefits.

To my mind it's a good sign that people like Whiteflag are presenting an alternative view.But he should let his views speak for themselves: there is no need to attack dunstonh's more conventional approach, especially in a personal way, this just loooks childish and spiteful.

As someone who has been presenting alternative views for years, I can assure you people are not stupid, they can see what it in their interest if they are presented with the facts and they are properly explained without jargon.We should all welcome a broader discussion of the best ways to manage our money.

whiteflag_3

jem16 wrote: »

I think it definitely will depend on the individual's circumstances. If someone was still working or receiving other taxable income taking the income may not be advantageous.

Exactly - it depends on the individuals circumstances - so can you take that as my justification for disagreeing with Dh when he said "If you dont need the income you shouldnt take it in most cases".

It depends what you are looking for I feel. If it's a secure retirement income guaranteed for life then the pension annuity is going to suit a lot of people.

not sure what point your making here

What do you mean by annuity trap exaclty?

The fact you have to buy an annuity by 75 , therefore if you live to that edge you are going to have to hand over your pension fund to an insurance company. Therefore stripping out as much as can before you get to that age means you have more money in your hands.

It is a viable alternative for some. However with proper planning earlier perhaps a mixture of both would be best.

Agreed, however its a sad fact that for most people proper planning isnt done.

Thanks for explaining your viewpoint. To be honest I find it more helpful than your earlier points where you made it clear that you disagreed with Dunstonh but didn't really point out why. Do you not think so?

You make a fair point, however I find it somewhat strange that you and others dont apply the same rules to Dh and accept what he says. I cant remember you or others asking Dh to justify what he says- please correct me if im wrong.

whiteflag_3

jem16 wrote: »

Perhaps it's just me but the jargon of "cashflow planning" doesn't really tell me a lot and I doubt ( although I may be wrong) if it tells the OP much either.

Like everyone on these forums if people need clarification they only need to ask.

I dareay he has his reasons and is entitled to his viewpoint too.

Totally , I just think in the interest of balance you might ask him to justify his comments in the same way regularly ask me to justify mine. Dont you think that would be useful for the op and other readers as well.

I think it would be useful and more helpful to everyone

Please see above

whiteflag_3

EdInvestor wrote: »

there is no need to attack dunstonh's more conventional approach, especially in a personal way, this just loooks childish and spiteful.

Hello Edinvestor

Back to the baiting again - doesnt take long does it. You have not a shred of evidence to back this remark.

ps you are also wrong re signatures as well, are you just trying too cause even more trouble?

jamesd

fairypoppins wrote: »

Can you clarify what you meant by your second paragraph pls, not sure what you were answering.

I was commenting on the Pru quotation being unlikely to be a good deal.

fairypoppins wrote: »

How can I tell that my Pru quotation is a good deal ?

One easy way is to give Hargreaves Lansdown a call and ask them to give you some competitive quotes. They may not offer the best of the alternatives available but they should be able to beat the Pru offer.

fairypoppins wrote: »

We are considering going with the Pru's quotation, letting them know of my husbands condition. Taking the 25% - starting the monthly payments immediately and putting them into an ISA! Can anyone see any problem with that ? Remembering we have two other pensions...etc.

That's probably a bad idea. A better easy approach would be:

Call Hargreaves Lansdown and tell them:
a. You have a pension quote from Pru and don't need the income.
b. Ask them to give you an alternative quote for the annuity if you did want to take it now, bearing in mind the diabetes and any other health conditions.
c. Tell them that you'd like to transfer the pension pot to them, take 25% tax free lump sum and leave the rest in drawdown, without taking an income yet.
d. Ask them to tell you which of the funds they offer are almost identical to the ones that the Pru is currently using so you can keep the same investment choice at first.

HL probably won't offer the best annuity quote but this option has the advantages that:

1. You get the lump sum you're after.
2. With the drawdown option you're completely free to buy an annuity or use investments to get an income whenever you like.
3. You'll get some alternative annuity quotes to compare with the Pru so you will have a better idea how good or bad theirs are.

So it gives you some useful comparison and preserves your flexibility for later. It's not perfect but it's easy to deal with HL and it gets you an option that's almost certain to be better than what you're contemplating.

You can ignore the discussion between whiteflag, others and dunstonh. They are about circumstances that don't really apply in your case, because you're planning to spend the lump sum on something, probably debt reduction. That eliminates the potential to use it to improve cashflow. One of the cashflow reasons hinted at by whiteflag is one I may use myself: taking the lump sum and slowly spending the capital to boost income in the years between retiring and when the state pensions start.

If you'd like us to more certainly rule out other options we'd need to know your ages, your intended retirement ages, any work pensions and when they can be taken, the amounts of other non-work pensions and the amount you are projected to get from the state pensions.

jem16

whiteflag wrote: »

Exactly - it depends on the individuals circumstances - so can you take that as my justification for disagreeing with Dh when he said "If you dont need the income you shouldnt take it in most cases".

I don't have any problem with you disagreeing with Dh. However you never really justify your reasons properly.

not sure what point your making here

The annuity is a guaranteed amount for life. Other options may involve investing within an ISA which may still have a risk involved.

You make a fair point, however I find it somewhat strange that you and others dont apply the same rules to Dh and accept what he says. I cant remember you or others asking Dh to justify what he says- please correct me if im wrong.

For my part I don't feel I know enough - what he says sounds perfectly plausible and he usually gives enough info that I don't feel I need further clarification.

I have asked you for further info, not to justify your comments, but because you didn't actually give any info.

Perhaps if you offered your alternative viewpoint in a fair and balanced way as opposed to an aggressive personal attack, more people would see the need to ask Dh for justification of his comments. At the moment it just looks like taking the opposite viewpoint just for the sake of proving him wrong.

What I will comment on, regardless of whether you or Dunstonh is correct, is this;

Fairypoppins - before you and your husband make what is a major decision I would urge you to seek the advice of an IFA and see what is right for your circumstances.