Options to take on my pension, help/advice welcome

xylophone

whats to stop you saying you are a smoker to get a better income?

Cotinine test?
http://mse-vip-1.hosted-at.thebunker.net/showthread.php?p=53067663

AlanWragg

Thanks for you replies guys, guess I need to seek out an IFA, but I must say I still think they want a huge hourly rate.

This whole experience is starting to be very stressful, strikes me as no matter what you are going to struggle to get a value for money deal. I've heard of drawdown but even with that I believe any funds left are taxed at 50% before your kids get any inheritence.

I know it sounds wrong to advise youngsters against pensions but I really do believe pensions as they stand are poor value. With this new Auto Enrolement, to put low income people into a pension above a savings account is almost criminal.

Ask 10,000 people in my position over the next year if they would advise pension (even with tax relief and employers contribution) or savings account and I strongly suspect the majority would advise savings account.

I am bitterly dissapointed and wish I could have my money back, minus any tax relief as I hardly ever had employers contributions.

atush

I've heard of drawdown but even with that I believe any funds left are taxed at 50% before your kids get any inheritence.

Yes, with DD children would pay tax on a lump sum. But not so sure if they would lose out if they kept the money invested for their own future pensions. Your Spouse would inherit 100% for her own pension needs, w/o tax.

ajbell

jem16 wrote: »

Perhaps the fact that it's dishonest if you aren't?

Some companies may check.

I know but it does seem perverse that the worse your lifestyle is the more you are rewarded. I have 2 final salary pensions (one deferred and one currently being paid into) and i have never been asked the question and if i was i would answer honestly that i don't smoke.

GhIFA

AlanWragg wrote: »

Thanks for you replies guys, guess I need to seek out an IFA, but I must say I still think they want a huge hourly rate.

This whole experience is starting to be very stressful, strikes me as no matter what you are going to struggle to get a value for money deal. I've heard of drawdown but even with that I believe any funds left are taxed at 50% before your kids get any inheritence.

I know it sounds wrong to advise youngsters against pensions but I really do believe pensions as they stand are poor value. With this new Auto Enrolement, to put low income people into a pension above a savings account is almost criminal.

Ask 10,000 people in my position over the next year if they would advise pension (even with tax relief and employers contribution) or savings account and I strongly suspect the majority would advise savings account.

I am bitterly dissapointed and wish I could have my money back, minus any tax relief as I hardly ever had employers contributions.

Alan, the thing that is pulling the rate down so much is building in the index linking. It may also be worth looking at the figures an annuity could provide you with on a level basis - the "break even point" (I.e. where the index linked pension finally catches up and pays the same amount that the level pension will give you from outset may be so many years into the future that it becomes too costly a benefit to make worthwhile). Drawdown will allow you to retain control of the funds. The tax charge is understandable to a certain extent, you've had tax relief on the contributions going in, a virtually tax free environment whilst invested, and the option for a tax free lump sum on the way out - HMRC are always going to want to get their cut somewhere along the line! And with the best will in the world, pensions aren't designed to be vehicles with which to transfer wealth to future generations, they're designed to provide income in retirement.

The reality is that without the tax relief and the employer contributions, the level of savings is likely to be much lower than the pension fund will be over the longer term.

AlanWragg

Thanks GhIFA, I have been on MAS again and flat rate pension will be about £7000 (5 yr guarantee, 50% spouse).

Will an IFA beat this?

I suppose our state pensions will provide some inflation proofing!:o

jem16

ajbell wrote: »

I have 2 final salary pensions (one deferred and one currently being paid into) and i have never been asked the question and if i was i would answer honestly that i don't smoke.

It's not applicable for final salary pensions anyway. These are simply based on your length of service and final salary. Makes no difference whether or not you smoke so nobody is going to ask you.

jem16

AlanWragg wrote: »

Thanks GhIFA, I have been on MAS again and flat rate pension will be about £7000 (5 yr guarantee, 50% spouse).

Will an IFA beat this?

It doesn't matter what kind of annuity you are looking at. An IFA will get the best quote.

However as has already been said, you really need to look at all options which is what an IFA would do.

GhIFA

AlanWragg wrote: »

Thanks GhIFA, I have been on MAS again and flat rate pension will be about £7000 (5 yr guarantee, 50% spouse).

Will an IFA beat this?

I suppose our state pensions will provide some inflation proofing!:o

I would expect an IFA to beat this - MAS only has a selection of providers. An IFA will have access to more, and better negotiating power. But they will also look at the other options available to you.

dunstonh

Thanks for you replies guys, guess I need to seek out an IFA, but I must say I still think they want a huge hourly rate.

You wouldnt say that if you had knowledge of the costs. You dont surely think that the whole amount goes in the pocket do you?

I know it sounds wrong to advise youngsters against pensions but I really do believe pensions as they stand are poor value.

Why?

Thanks GhIFA, I have been on MAS again and flat rate pension will be about £7000 (5 yr guarantee, 50% spouse).

Will an IFA beat this?

MAS uses standard terms from providers using the RRP. It does not benefit from the haggling and economies of scale that an IFA can get. Also in the past, the tables on that site have been out of date and not current.

To put it in some context, an IFA would not use the MAS tables as they are too unreliable.