Planning for the future at 55

mjdh1957

Hi everyone,

I've been thinking for a while that I need to look again at the financial provisions for my future, and before I see a financial adviser I'd like a quick guide to what the options might be.

I'll be 55 in August, am self-employed and can realistically carry on working past the normal retirement age, which in my case is now 66.

I have the following pensions in place:
A Railway pension scheme frozen since 1988 with 9 years of contributions. I don't have a recent valuation for this.
A private pension from Abbey Life, which I only paid into for a short time before being advised to stop and take out a stakeholder pension. The value on this is now £2200.
A stakeholder pension from Aviva (formerly Norwich Union) with a current value of £19000.

I also have an endowment policy which will mature in about seven years, not linked to a mortgage, which might pay out over £40,000, and about £3000 invested in an investment trust.

I have about £3000 in short-term savings, and an insurance in case I fall ill and can't work.

The other big issue is that my partner (we have been in a Civil Partnership since 2008) is just about to take ill-health retirement from the Co-op Financial Division at the age of 47. He has secondary cancer and his life expectancy is twelve months (though we hope he will last longer than this). We will be seeing a financial adviser as part of the conditions of taking the early retirement, and obviously I will be asking lots of questions of him/her (though I'd appreciate some guidance on the right questions to ask). I believe he will be taking a lump sum then a pension for life, and then there will be a smaller pension remaining for me.

So, I have heard on this board that stakeholder pensions are now not as good as they used to be. I did think that when the time comes and I am on my own I would use some of my partner's lump sum (and insurances that will pay out) to boost my own pension plan. Does that sound sensible, and should I be looking to start a new pension plan rather than put it into the Aviva stakeholder pension? I didn't start the private pension until I was over 40 and haven't increased the payments into it in recent years, which explains why the sums are relatively small.

Being mortgage free and with no debts, I believe I could manage on a lower income than I have now, so might take the opportunity of his pension income payment to reduce my working hours. My partner has always earned more than me so has substantial savings, whereas I've always struggled to save as we divide large expenses equally.

Any thoughts and initial advice on where to start?

Thanks!

atush

First of all, as Civil partens have you been declared the beneficiary on the pensions and life insurance policies? what are the survivor's benefits exactly? will they be enough to see you thru while still working?

You need to check the charges of your current pensions, plus what they are invested in, and the options should you want to change funds. you may find a cheaper deal moving them both into a new policy. Are you still contributing?

Get an up to date projection of benefits from your old FS scheme.

you are self employed, so I assume been paying the lower SE contribs? Get a pension forcast from the DWP.

xylophone

Presumably your partner has made a will? If not, it might be as well for him to see a solicitor and do so?

mjdh1957

We have made wills and I am the principal beneficiary and executor. I am also named as beneficiary on his work pension.

I am still making monthly contributions to my Aviva stakeholder pension.

I am a bit more confused now about my partner's early retirement settlement - we've not had the formal offer yet and will need to see a financial adviser but he seems to think that what will happen is that he can take his entire pension as a lump sum, so not get a regular pension payment. Does that sound possible?

For myself, the main question is, should I carry on paying into my Aviva stakeholder pension, including extra payments using the lump sum when I get it, or start a new plan with someone else. I'm also considering stocks and shares ISAs for part of the money.

Thanks.

atush

If he can take his whole pension as a LS, it will probably be better for you as the survivor.

AS to continue or open a new PP for you, you need to look at the charges and funds available, and see if you can find better elsewhere.

xylophone

http://www.mycompanypension.co.uk/Terminal-Illness-Pensioner-Members-DB

mjdh1957

xylophone wrote: »

http://www.mycompanypension.co.uk/Terminal-Illness-Pensioner-Members-DB

Thanks, that was genuinely eye-opening, though he is of course currently an active member so a different document was relevant.

So it appears he can take the whole lump sum and I can still get a survivor's pension. I feared that if he did that I might end up worse off after he died.

He should get the formal offer tomorrow so we can talk about it after that, and then set up the appointment with the financial adviser that the Co-op will choose.

I'll ask him/her for recommendations for myself, and possibly also see an independent financial adviser before taking any decisions. I don't think I'm qualified to choose a new pension, as the talk of different charges, funds and investment strategies just confuses me more.

Thanks for all the advice.

mjdh1957

As an update, the formal offer of early retirement was a big shock for both of us. The lump sum offer is over three times what we were expecting (with no pension payable to him), and my survivor's pension is 50% more than I was expecting. So it looks like we will have no money worries for the foreseeable future. We will be going to see the financial adviser soon.

Thanks for all the advice.

jamesd

Good to read that you got a pleasant surprise. Good luck with the rest!