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Pension need to knows Official MSE Guide Discussion

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  • dunstonh
    dunstonh Posts: 116,701 Forumite
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    but I work within a local authority and opted out of the pension due to effect it will have on my income.

    OMG. What a really bad decision that is.
    I just want a simple straight forward pension that I can I can pay into.

    As an opt out, you will find most providers will refuse to allow you to set up a pension with them as the LGPS is by far the better option. Providers are not allowed to accept business, even on non-advised basis, where they know the product is unsuitable. LGPS wipes the floor with any stakeholder pension/personal pension.

    Get in the LGPS ASAP.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • gotbeef
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    Hi thanks for the replies, maybe I should elaborate - my wife is a teacher obviously we both pay state pension. what I mean is that she has a teachers pension.

    I quit my freelance work (no pension) three years ago and started working in low paid school position with the intent to be a teacher. I opted out paying the pension (not state pension) because I figured that in year or so I would be a teacher with a pension. Things did not go to plan and decided that this is not the career for me. Since then I've remained in the school, changed position at higher pay but at a bit of a loss career wise. Of course being in my thirties I'm worried about pensions and I'm not sure if I will continue to work within education. If I start paying into my pension originally offered what happens when and if I leave the job for possibly for the private sector. Can I continue to pay into it? this is why I thought about a separate pension which might be easier and I decide how much to pay into it depending on my earnings.?

    I am clueless and would like some helpful advice. Thanks again
  • dunstonh
    dunstonh Posts: 116,701 Forumite
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    I opted out paying the pension (not state pension) because I figured that in year or so I would be a teacher with a pension. Things did not go to plan and decided that this is not the career for me.

    A very common scenario and just highlights what a mistake it was. You are not alone but it was a mistake.
    If I start paying into my pension originally offered what happens when and if I leave the job for possibly for the private sector. Can I continue to pay into it? this is why I thought about a separate pension which might be easier and I decide how much to pay into it depending on my earnings.?

    You cannot continue it but it will retain its benefits and be increased annually to retain a real terms value. A personal pension would not come close and it would be a mis-sale if a personal pension was set up for an opt out.
    I am clueless and would like some helpful advice.

    Join the work scheme. No brainer.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • jem16
    jem16 Posts: 19,404 Forumite
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    gotbeef wrote: »
    what I mean is that she has a teachers pension.

    Ah so you meant a Public Sector pension.
    I quit my freelance work (no pension) three years ago and started working in low paid school position with the intent to be a teacher. I opted out paying the pension (not state pension) because I figured that in year or so I would be a teacher with a pension.

    Really bad decision. If you had become a teacher, you would have been able to transfer your LGPS pension into the Teachers' Pension Scheme and retained all of the benefits against a higher salary increasing in line with CPI.
    If I start paying into my pension originally offered what happens when and if I leave the job for possibly for the private sector. Can I continue to pay into it?

    No you would not be able to continue paying into it. If you had at least 2 years service, you would have simply left it there and it would become deferred until normal retirement age.
    this is why I thought about a separate pension which might be easier and I decide how much to pay into it depending on my earnings.?

    I am clueless and would like some helpful advice. Thanks again

    It might be easier but would cost you around 15%/20% of lost employer contributions plus a guaranteed, no risk pension on retirement.

    Join the LGPS as as soon as possible.
  • whetr
    whetr Posts: 2 Newbie
    edited 12 March 2013 at 12:52AM
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    I have informed that I have 3 options by my final salary pension provider with regard to my preserved benefits which can be taken from ? 60 years of age . Initially I was considering taking the maximising lump sum. If deferred a GMP becomes payable? I have no income so am considering the options although if deferred, I am informed I will get a reduced pension and it may also affect the options available later. Yet my unreduced pensions are payable as of 11/05/2016 which is my retirement date. Everything seems confusing . Can you help ? The pension is not a lot standing at just under £14,000 lump sum if taken now and slightly higher as maximising up to 21,000 but with lower annual payout of £3,278 approx.
  • Linton
    Linton Posts: 17,248 Forumite
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    whetr wrote: »
    I have informed that I have 3 options by my final salary pension provider with regard to my preserved benefits which can be taken from ? 60 years of age . Initially I was considering taking the maximising lump sum. If deferred a GMP becomes payable? I have no income so am considering the options although if deferred, I am informed I will get a reduced pension and it may also affect the options available later. Yet my unreduced pensions are payable as of 11/05/2016 which is my retirement date. Everything seems confusing . Can you help ? The pension is not a lot standing at just under £14,000 lump sum if taken now and slightly higher as maximising up to 21,000 but with lower annual payout of £3,278 approx.


    Sorry I am very confused as to what you are asking. It might make it clearer if you say how old you are, the details of the 3 options, and what you want to achieve.

    Generally, unless there are special circumstances, it seems best with Final Salary pensions to minimise the lump sum and not to take the pension early.
  • autocrazy
    autocrazy Posts: 12 Forumite
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    Hi

    I am an immigrant who works in the UK. If I take up the company pension on offer and say 5 years from now go back to my country of birth what happens to my pension fund?

    Also I only intend to invest in Equity based funds not Debt based. My company pension is managed by Aviva - what equity based funds can I invest that are not index based but rather more specific sector based or even company based (like investing in a specific stock).

    I don't know if I have explained very well, but any further question I can answer. I shall appreciate any sound advice from people on the forum.
  • Birdy62uk
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    Hi
    I have received a couple of calls from the "pension review line" apparently a free service to help review your current pension on how it's performing and giving advice by an ifa?

    Has anyone had any dealings? I'm reluctant as I have no idea about pensions and don't want to sign up to anything. They say no obligation but will send a courier to get copies of policies, passport/driving license etc?.. Is this company reliable?

    Any advice would be good
    Thanks
  • Aegis
    Aegis Posts: 5,688 Forumite
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    If they called you out of the blue without prompting, then the best course of action is to have no dealings with them. This is the typical behaviour of a company which will lock your pension into a poor investment with a huge commission, leaving you much worse off.

    If you want advice on your pension, find a local IFA from a site like unbiased.co.uk.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • dunstonh
    dunstonh Posts: 116,701 Forumite
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    I have received a couple of calls from the "pension review line" apparently a free service to help review your current pension on how it's performing and giving advice by an ifa?

    It is against FCA rules to cold call on investments and investment products. So, the minute you get a cold call on pensions, you know it is either a scam or a company acting outside of regulation or an unregulated scheme offering no consumer protection.
    They say no obligation but will send a courier to get copies of policies, passport/driving license etc?

    No requirement for any of that. Possible identity fraud?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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