Pension need to knows Official MSE Guide Discussion

dunstonh

Blackwhite69 said:

I am 66 years old in may and in poor health and have decided to take my personal pension from Phoenix Life in a lump sum, i'm aware of getting the first 25% tax free but at what rate will the other 75% be taxed at.

Is your health so poor that you need to take it all in one lump sum?  Or could you phase it each tax year to reduce tax?
How much are you talking about (quite important)

cfw1994

I note (& have oft-quoted!) item 3 shown here:
There's a very rough rule of thumb for what to contribute for a comfortable retirement...
Take the age you start your pension and halve it. Then put this % of your pre-tax salary into your pension each year until you retire.

However.....I note it does not give much/any indication WHAT that 'comfortable retirement" might look like, and from what age, etc.
I appreciate it depends whether one means "comfortable at point of State Retirement" or earlier.....but does anyone KNOW what MSE are referring to there?    What % of final salary is anticipated should this RoT be slavishly followed, etc!

eskbanker

cfw1994 said:

What % of final salary is anticipated should this RoT be slavishly followed, etc!

The 'rule' envisages the percentage being static rather than dynamic (although salary would naturally be expected to grow over time), i.e. for those starting at 20, contribute 10% of salary right up to 65/70/whatever, but for those starting at 40, contribute 20% every year.

However, as you point out, it's very rough and ready, and there are so many variables involved in retirement planning that it's not sensible to follow it slavishly without further thought given to retirement lifestyle and how best to fund it.  The main purpose of the rule was to encourage people to recognise that starting early is generally advisable, but it stems from the era before auto-enrolment effectively forced people to contribute to pensions whenever working....

cfw1994

Thanks: I was curious about the meaning of "comfortable retirement" there.
Which? has sort of a definition here.....wondered what the MSE definition was!

kuratowski

On the "definition" of comfortable retirement, some research giving another version of that is quoted here:
https://www.retirementlivingstandards.org.uk/details

			Single		Couple
Minimum			£10,200		£15,700
Moderate		£20,200		£29,100
Comfortable		£33,000		£47,500

These figures are national, with separate (higher) figures for London as shown in the above link.

isolar76

I started paying extra into my pension just a few months ago, £300 extra p.m., once I finished paying my mortgage. I'm 55 and work in local government, so I'm hoping our pension scheme is fairly decent. I'm hoping to retire at 60, so am wondering if it's worth paying the extra or should I just put the cash into my savings account. 

Silvertabby

isolar76 said:

I started paying extra into my pension just a few months ago, £300 extra p.m., once I finished paying my mortgage. I'm 55 and work in local government, so I'm hoping our pension scheme is fairly decent. I'm hoping to retire at 60, so am wondering if it's worth paying the extra or should I just put the cash into my savings account. 

Are you buying additional LGPS pension (APC) or paying into an in-house AVC?

hazel233

Can I withdraw my pension which I do not pay into any
more ? I am over 55 ?

eskbanker

hazel233 said:

Can I withdraw my pension which I do not pay into any
more ? I am over 55 ?

Worth spending some time reading the article that this thread is set up to discuss (linked from page 1), which explains, among many other things, the different types of pension - if you're referring to a defined benefit (final salary) scheme then you'll be subject to the rules of that scheme, whereas defined contribution (money purchase) schemes typically offer more flexibility.  If you need further assistance, post as much detail as you can so that people can offer meaningful guidance....

hojr

i have just turned 75 . i have pensions with 2 companies from 2 jobs i had during my working life. Aviva is now 120k from when i was redundant in 1990. St Life has one 24years 165k and has 41% tax free and another  for last 6 years after i was approaching 70 years of age worth 40k.  i will go for flexi income draw down ( not regular ) . i intend  to take the 2nd SL 40k in full soon then will take 36k each tax year from 2021 so that i dont pay higher tax. i see SL is getting out of pensions , Aviva is saying i must act quickly to avoid going to an automatic annuity then the rest goes to a SIPP . Is expert advise to put all monies into to one ? which of the two is the choice to be made .