Final salary pension help

Andy66_3

Hi there - looking for some advice on final salary pensions. I am 46 and currently have 22 years in a 60'ths scheme plus an additional year of avc.

The company is not going the way I would like and I have a couple of job offers which are interesting but I feel a little tied to the pension.

If I was to leave can anyone confirm at what age I could retire and access the scheme at the earliest - my understanding is that this is 65 ?

This makes it an even harder decision but if I was able to access my pension at 60 or earlier then it would seem to be a real option to move on.

Appreciate your thoughts on this and if I was to leave what the best options are for further pension provision or scheme transfer - note any new employer would offer money purchase scheme only

Many thanks

Andy:A

Lokolo

You will have to read through the scheme's rules. Some allow earlier access but with penalties (which can be severe), some don't.

I wouldn't be stopping the FSP or even think about transferring it.

However if you are thinking about wanting to retire earlier than 65 then you should perhaps be thinking about additional separate retirement plan. Either in an ISA or another pension.

Andy66_3

Yes I would ideally like to retire early. What can I do with the fss - assume I can no longer contribute to this ?
I am not Familiar with isa schemes - does this just build into a pot with which I buy an annuity or are there also tax advantages ?
I need to review the rules - bit late for that tonight but will have a look in the am
Many thks
Andy

Lokolo

No you won't be able contribute to the FSP unfortunately. It will effectively "freeze".

You can do many things with ISAs, you can choose to buy an annuity if you like or you can just take income from it (ISAs are accessible).

I would wait until you have a new job before deciding, the new company may have a decent pension scheme.

JoeCrystal

Lokolo is referring to Cash or S&S ISA (Individual Savings Account). It allows people to save money or invest moment up to a certain limit per year tax free. So in Cash ISA, the interests would be paid gross.

Cheers,
Joe

katejo

Andy66 wrote: »

Hi there - looking for some advice on final salary pensions. I am 46 and currently have 22 years in a 60'ths scheme plus an additional year of avc.

The company is not going the way I would like and I have a couple of job offers which are interesting but I feel a little tied to the pension.

If I was to leave can anyone confirm at what age I could retire and access the scheme at the earliest - my understanding is that this is 65 ?

This makes it an even harder decision but if I was able to access my pension at 60 or earlier then it would seem to be a real option to move on.

Appreciate your thoughts on this and if I was to leave what the best options are for further pension provision or scheme transfer - note any new employer would offer money purchase scheme only

Many thanks

Andy:A

I can't advise you but am interested in seeing responses you get as my situation is similar. I am almost 50 and have been paying into the scheme for over 22 years. Back in about 1993 I started paying 7 years worth of AVC's. two years to fill a gap and an extra 5 years so I could retire at 60 if I wanted to. I have already paid for about 3-4 extra years.
I am fed up with my current job. I don't want to leave the scheme but feel tied.

stinktankcynic

I had to make the same decision years ago. It is hard, but if your not happy then be prepared to lose the final salary benefit for a new exciting job. I think my old scheme increases at a certain % each year, this is good when you consider the number of pay freezes and low increases that there have been over the years.

Andy66_3

Lokolo wrote: »

No you won't be able contribute to the FSP unfortunately. It will effectively "freeze".

You can do many things with ISAs, you can choose to buy an annuity if you like or you can just take income from it (ISAs are accessible).

I would wait until you have a new job before deciding, the new company may have a decent pension scheme.

I have a couple of verbal offers so just need to get some detail. One is a small company with no scheme, the other is larger with a 'defined benefits scheme' - does defined benefits mean final salary ? - I haven't looked at pensions other than my own or a long time.

Is it possible that the new scheme would let me retire at 60 but I still wouldn't be able to access my current scheme until 65 ?

Or is retirement a one off event and I could draw both pensions albeit with a reduction on the original scheme ?

Hope that makes sense !
Andy:think:

Lokolo

Andy66 wrote: »

I have a couple of verbal offers so just need to get some detail. One is a small company with no scheme, the other is larger with a 'defined benefits scheme' - does defined benefits mean final salary ? - I haven't looked at pensions other than my own or a long time.

Is it possible that the new scheme would let me retire at 60 but I still wouldn't be able to access my current scheme until 65 ?

Or is retirement a one off event and I could draw both pensions albeit with a reduction on the original scheme ?

Hope that makes sense !
Andy:think:

Defined Benefit is Final Salary yes.

I can't tell you about the retirement age on the Final Salarys as they are usually independent of each other so you would have to look at the specific schemes.

With other pensions, such as stakeholder and SIPPs you can currently access from 55.

With NI contributions you are also entitled to State Pension at around 67 (I am unsure of the access age as it always changes and isn't relevant to me for a long while!).

atush

You do want the DB scheme over the other job all things being equal. Do be aware that the small company has to offer a pension in t he next few years due to legislation so you could ask them what they propose.


Another thing you need to look at are the other benefits such as death in service and the ill health retirement provisions.

bigfreddiel

i left a fs 60ths scheme in the 80's - made redundant - i was only in it for 3 years so my contributions weren't exactly vast - well its due to be paid out now and its paying £3k/year which i'm quite happy about.

so your 22 years worth of fs will be well worthwhile whenever it's due - just leave it till its due date!

fj