Pension planning advice for couple nearing 60s

gadgetmind

jennifernil wrote: »

He has not worked here long enough to have enough contributions for a full pension, so mine is likewise reduced.

I haven't looked in detail, but I know there are minimum state pension income guarantees, and also says for people to buy additional pension years even if they have already retired, but you can only go back so far.

Anyway, good luck with using triviality and maybe immediate vesting to boost things. Maybe MSE need to do an article on this as lots of people don't seem to know about it and it's FREE MONEY!

jennifernil

If I did go down one, or more, of those routes, what would happen to the money still invested if I were to die before taking any money out?

gadgetmind

jennifernil wrote: »

If I did go down one, or more, of those routes, what would happen to the money still invested if I were to die before taking any money out?

An excellent question, and one that not enough people ask.

Prior to taking benefit from your pension, the pot will be held in trust and the trustees will pay it out to whoever you nominate. (Technically, they don't have to, but in practice they do.)

This money is outside your estate (which is what the "trust" bit means) so it can be paid in full, free of tax, and very quickly.

Annuities are different. Unless you take a lower rate to buy a spouse annuity (50%, 100%, you choose) then the income dies when you do. You can get a guaranteed payout period (choose how many years) so your spouse will be paid for a while after death, but again your initial income will be reduced.

For larger pension pots, you can use what's called drawdown rather than buying an annuity, but the fees mean it's not really an option for you.

Summary: The triviality pension is a no brainer. Immediate vesting pensions afterwards need more thought but you're about five years off having to make that decision.

See here for more info on pensions if/when you die.
http://www.thisismoney.co.uk/money/pensions/article-1692795/What-happens-to-my-pension-pot-if-I-die.html

jamesd

jennifernil wrote: »

He has not worked here long enough to have enough contributions for a full pension

Has he asked whether he is able to make payments to get more years? Some people are allowed to do that even after having retired and starting to take the state pensions.

One case is covered by How to increase your State Pension if you reach State Pension age between 6 April 2010 and 5 April2015 which lets up to six years going back as far as 1975 be purchased. Those dates are from when the new 30 year rule applied so this can't apply to your husband. But there may be another case that does apply.

jennifernil

He has worked in UK from 1970 to retirement in 2007, so had 37 years contributions, plus some graduated and some serps, so though reduced, he still gets a decent amount. As I was mainly a "stay at home mum" I have only minimal contributions and have claimed the 60% of his, but that is 60% of his reduced basic amount, so only just over £50 per week.

So I don't think there is any possibility of increasing the State Pensions now. He has never been offered to buy missing years, but has never asked either.

In any case, he has a very good Final Salary pension, plus a State Pension from Norway where he had about 12 years of contributions/credits, so the overalll amount is more than enough, just very badly divided in so far as I do not have enough income to use all of my personal allowance, although that would change a bit if interest rates were 6% rather that 3%.