Pension need to knows Official MSE Guide Discussion

jem16

Tino wrote: »

do I have to transfer that money to a SIPP or can I transfer it to a stocks and investments ISA?

Thanks in advance

It can only be transferred to another pension. If you want it in an ISA you have to withdraw it from the pension provided you are over 55.

Tino_2

jem16 wrote: »

It can only be transferred to another pension. If you want it in an ISA you have to withdraw it from the pension provided you are over 55.

Thanks Jem, I thought that was the case but wanted to check - SIPP it is for me then!

cayteye

I'm a freelancer. I've not had a pension for several years and used to have a bbc prudential pension - its not got much in it- i've no idea what the best option for me is to save. any ideas?

dunstonh

cayteye wrote: »

I'm a freelancer. I've not had a pension for several years and used to have a bbc prudential pension - its not got much in it- i've no idea what the best option for me is to save. any ideas?

I'm afraid that your question cant be answered as it is as you provide no specifics. We dont know what you have, want you want and need or really nothing about you.

vbt

Hi everyone,

I was wondering if anyone can help. I'm in the process of looking for an IFA for some advice too, but in the meantime would be interested to hear any thoughts people have.

I am 33 years old and female. My state pension age is 68 and I would ideally like to retire before this (I can but hope!). I am a higher rate tax payer.

I recently left the public sector where I had built up 8 years service under a final salary pension scheme. This pension is now sitting there until I retire (which is where I want it to stay), but I can no longer pay contributions in to it, and neither does my employer.

I also have a small stakeholder pension, I've been paying in about £40 a month for 10 years or so. It's with Legal and General.

My new employer is quite small, and does not have a company pension scheme (it will fall under automatic enrolment in 2017) and so at the moment I don't pay in or receive contributions to an employer-based scheme.

I need to now sort out a private pension and was wondering if anyone had advice on what type would be the best? I want a decent level of security and relatively low risk (as far as is possible anyway), and because my stakeholder pension is quite small and not accruing a great deal I would ideally like to transfer this to something better performing if transfers are possible.

I've just read in this guide that as a higher rate tax payer I can possibly claim tax relief and backdate this?? I'm still confused about this, so will also be speaking to an IFA about this aspect if possible, but if anyone has done this or has advice that would be great.

Thanks in advance for any help!

onesixfive

Have rules altered please?
Throughout your Pension need-to-knows everything points to drawing at 55 - no exceptions.
I have monies in a Local Govt Pension Scheme Pension which I'd like to draw at 55 in June, but I'm told I cant have until I'm 60 because the local council cant afford the £40k+ needed to release my funds early! (I've tried deferred benefits on compassionate grounds, to no avail).
I've queried this before on forums, but this is never addressed - yet must/will affect 1000's of ex-council employees ??

dunstonh

Throughout your Pension need-to-knows everything points to drawing at 55 - no exceptions.

Not sure where you got that idea from as nothing could be further from the truth. Indeed, if you wanted a single sentence that gave the majority position (which means it wont be right all the time) is that you leave the pension where it is for as long as you dont need it.

I have monies in a Local Govt Pension Scheme Pension which I'd like to draw at 55 in June, but I'm told I cant have until I'm 60 because the local council cant afford the £40k+ needed to release my funds early! (I've tried deferred benefits on compassionate grounds, to no avail).

Seems reasonable and in line with epectation.

I've queried this before on forums, but this is never addressed - yet must/will affect 1000's of ex-council employees ??

I cant say the numbers but it would be a tiny number overall as very few people attempt to take their money out of the pension at 55.

greenglide

The LGPS has changed over the years but deferred members (like you) are left in the scheme as it was. The more recent changes have actually allowed deferred members more flexibility when they take their pension (before or after the scheme date) but previously you couldnt. The version I am in didnt allow deferment beyond 60 which is what I wanted to do so I had to accept the money and arrange a home for it.

Presumably you are in the same version whereby they will not allow deferred members to take the money early as there is no concept of actuarial reduction so they would have to pay the full value.

Since this has been the case since you left their employment why should they change now? You could always have stayed in their employment of course!

hyubh

sng165 wrote: »

Have rules altered please?
Throughout your Pension need-to-knows everything points to drawing at 55 - no exceptions.

Wrong. However, 'pension need-to-knows' are increasingly focussed on modern DC pensions, since those are what most people with an active pension have, notwithstanding the fact DB pensions were once as common in the private sector as they still are in the public sector.

I have monies in a Local Govt Pension Scheme Pension which I'd like to draw at 55 in June, but I'm told I cant have until I'm 60 because the local council cant afford the £40k+ needed to release my funds early!

Yes, the earliest age for a voluntary early retirement under the final salary scheme LGPS was 60 (and I think still is for the CARE scheme in Scotland). The issue is that under the scheme rules, drawing benefits before then if not done on ill health terms usually involves a strain charge to the employer that is calculated on terms decided at the fund not scheme level (actuarial reductions, in contrast, are the other way round); the strain charge is also a capital cost, i.e. the employer cannot just spread the cost over the early retiree's lifetime.

(I've tried deferred benefits on compassionate grounds, to no avail).

Will still involve a strain charge that the employer must pay.

I've queried this before on forums, but this is never addressed - yet must/will affect 1000's of ex-council employees ??

So what? There is no rule that forces early access at 55, and as a local council tax payer you wouldn't want your local council to just give away pension monies to its employees, surely?

B_Lofthouse

I suspect that, like me this week, many others will have found, when receiving their annual pension statement with charges fully disclosed for the first time, they amount to rather more than had been imagined. An annual fee of 0.80% sounds quite small but I have found that in my case this equates to a deduction of about 11.25% of the premium I pay every month. Given the recent poor investment performance of the fund, I may as well be throwing money away. I do feel that the basis of charges and their actual percentages in relation to monthly contributions needs to be made much clearer.