Great Things To Know Before You Retire Hunt

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  • If you are suffering from any long term illness or condition make sure you check if you qualify for an impaired life annuity. These are available from several different providers and can boost the annuity by quite large percentages.
    Always but always seek out a fully qualified IFA, forget the banks and tied agents and find one that will work for a fee. You need someone you are comfortable with and who is available when you need them.
  • I had to retire at 62 because of ill health. My works pension and a private pension were paid at a slightly reduced rate and we didn't have a lot.
    Although applying for Pension Credit is a frustratingly long procedure the results were well worth the effort. My income was more than doubled, but only till State Pension kicked in, at which time my income was sufficient without the Pension Credit.
    So my advice to anyone retiring now is to apply for Pension Credit - you never know what they might give you - and remember it's not charity, it's what you paid in for all those working years.
  • al_yrpal
    al_yrpal Posts: 339 Forumite
    home_alone wrote:
    my main worry (if you can call it that) is IHT, I do not want to become Gordon Browns best friend,

    gary

    You're face the pain of downsizing. I have observed many pals doing the same thing. Very painful and stressful. That is why we stopped upsizing, bought a second home, boat, nice cars and travel where and when we want. I know a lot of people's aim is to buy the biggest property they can, but its so often a mistake because they face this problem and the problem of a big beast of a garden to maintain in worsening health. You can end up asset poor and cash rich too. Personally, I find my allotment a great asset for vegetables (I can dump it any time) and our nice little gardens take an hour or less a week to keep looking good.
    The best way to scupper Brown is to spend it. Although I helped one of my kids onto the housing ladder, I'd much rather they made their own fortunes. In my opinion we do them no favours whatsoever by showering them with hard earned wealth.
    Survivor of debt, redundancy, endowment scams, share crashes, sky-high inflation, lousy financial advice, and multiple house price booms. Comfortably retired after learning to back my own judgement.
    This is not advice - hopefully it's common sense..
  • ckerrd
    ckerrd Posts: 2,641 Forumite
    merched99 wrote:
    This might save you thousands if you are being made redundant and are lucky enough to have a final salary pension scheme. You can put any redundancy payment above £30,000 (which would normally be taxable) into your pension, and get it straight back again tax free under the rules about converting part of your pension to a lump sum -- but ONLY if you are eligible to draw your company pension. For some reason (at least with my scheme) they can't tell you about it unless you ask....... In my case I was going to leave a few months before turning 50, and would have had to pay tax at 40pc on the lump sum. Found out by chance about this, and have now got agreement to stay the extra few months until my 50th birthday so can take advantage of it.
    This sounds exactly like my situation. About to be made redundant, hoping that it will be when I hit 50 in a few months, and then can take a pension. I have never heard about this converting thing. Could make a big difference to my future.
    Getting info seems to be difficult. If you know the right questions to ask then you are fine, but if, like me, you are just hoping for advice then I imagine you can miss out. Is there anywhere I can find out about the converting malarkey?
    We all evolve - get on with it
  • chapmag
    chapmag Posts: 62 Forumite
    merched99 wrote:
    This might save you thousands if you are being made redundant and are lucky enough to have a final salary pension scheme. You can put any redundancy payment above £30,000 (which would normally be taxable) into your pension, and get it straight back again tax free under the rules about converting part of your pension to a lump sum -- but ONLY if you are eligible to draw your company pension. For some reason (at least with my scheme) they can't tell you about it unless you ask....... In my case I was going to leave a few months before turning 50, and would have had to pay tax at 40pc on the lump sum. Found out by chance about this, and have now got agreement to stay the extra few months until my 50th birthday so can take advantage of it.

    Is the above correct? Does anyone else have experience in this area. I understood that I could take 25% of my pension fund as cash and the rest as pension.

    So logically, if'd I pay all my over £30k redundancy into my pension fund I would only be able to get 25% of it back tax free.

    Anyone able to clarify would be very much appreciated!!
  • chapmag
    chapmag Posts: 62 Forumite
    al_yrpal wrote:
    You're face the pain of downsizing. I have observed many pals doing the same thing. Very painful and stressful. That is why we stopped upsizing, bought a second home, boat, nice cars and travel where and when we want. I know a lot of people's aim is to buy the biggest property they can, but its so often a mistake because they face this problem and the problem of a big beast of a garden to maintain in worsening health. You can end up asset poor and cash rich too. Personally, I find my allotment a great asset for vegetables (I can dump it any time) and our nice little gardens take an hour or less a week to keep looking good.
    The best way to scupper Brown is to spend it. Although I helped one of my kids onto the housing ladder, I'd much rather they made their own fortunes. In my opinion we do them no favours whatsoever by showering them with hard earned wealth.

    I agree with your ultimate point entirely. We (my wife and I) had to struggle to get on the property ladder and to gift our children would in my opinion be irresponsponsible. At the end of the day my kids will inherit a good deal of property and assets.... if they have not learnt to appreciate its worth what have I done with my life and their upbringing???
  • Osinac
    Osinac Posts: 5 Forumite
    Bogof_Babe wrote:
    When my husband got a quote from his employers for his pension, while deciding whether to take vol redundancy/early retirement, he was given a fixed figure - either a certain fixed lump sum and so much per annum, or no lump sum and a greater amount per annum.

    No mention of annuities was made, or the need to sort one out. His pension was a final salary contributory scheme, so perhaps this is why it differs from the scenario of annuities?

    I've always been a bit confused by all this, and I bet I'm not the only one. Any clarification will be gratefully received.

    Your husband was a member of a final salary scheme which is usually based on 1/60 or 1/80 of final salary times the number of years served. Eg Final salary £30,000 years in scheme 20, you would get £10,000 in 1/60 scheme and £7,500 in 1/80 scheme if you work to the schemes retirment date. BUT if you are made redundant or retire early you may get a very penal actuarial reduction based on the number of years left to retirement date.Your husband should ask what the reduction is and what his pension would be if he worked extra years You should try to get the actuarial reduction reduced as part of your retirement/redundancy package. It is quite often worth giving up some of your cash payment to reduce this. Unfortunately many schemes will allow no negotiation. . Final salary schemes are usually better than money purchase schemes which give a lump sum which can be used to purchase an annuity, but most employers are now moving away from final salary towards money purchase.
  • martin71
    martin71 Posts: 22 Forumite
    First Anniversary Combo Breaker
    Hello - Can I ask which bank provides this free service for the over-65s, please?

    Thanks
    Martin
  • chapmag wrote:
    Is the above correct? Does anyone else have experience in this area. I understood that I could take 25% of my pension fund as cash and the rest as pension.

    So logically, if'd I pay all my over £30k redundancy into my pension fund I would only be able to get 25% of it back tax free.

    Anyone able to clarify would be very much appreciated!!

    The first £30,000 of any redundancy payment is tax free. So it doesnt need to go into your pension fund. The rest if taken as a straight lump sum is taxable at the current rate which could be as much as 40%. You are allowed to take 25% of your pension fund as a tax free lump sum . If ther residue from your redundancy payment goes into the pension fund the amount you can take out as a tax free lump sum stays the same but because you are effectivly topping up your pension fund with the residual tax free lump sum the amount you will receive as a pension will not drop as much when you take the 25%. You are also now allowed to take a 25% tax free lump sum from any AVC fund Hope this helps
  • scoder
    scoder Posts: 9 Forumite
    chapmag wrote:
    Is the above correct? Does anyone else have experience in this area. I understood that I could take 25% of my pension fund as cash and the rest as pension.

    So logically, if'd I pay all my over £30k redundancy into my pension fund I would only be able to get 25% of it back tax free.

    Anyone able to clarify would be very much appreciated!!

    When I took early release from my employer I did the conversion (augmentation) before signing ER form, took an increased 25% lump sum and an increased pension. All quite legal, not sure whether applies to every scheme, you may need to verify the rules of your pension scheme.
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