miss

sunnygal53

Hi I am due to get my husbands pension 96.5% of it anyway in our divorce settlement. I have no pension of my own only a state pension and I really don't know where to start once the pension has been passed over to me. Not sure which pension provider would be best, should i get the advice of a financial adviser, which i really can't afford, HELP! I am 53 and work 16 hours per week and get tax credits I know in April 2015 I can take 25% of this income, which I may do to pay my small mortgage off.
any advice?

xylophone

April 2015 I can take 25% of this income,

How old will you be?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/301563/Pensions_fact_sheet_v8.pdf

xylophone

only a state pension

re single tier state pension - the legislation has now been passed.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

atush

What type of pension is it? Is it one that is based on his final salary like a public service pension, or will it be a pot of money?

If a pot, you need to look at putting it into another personal pension, or your work pension if you have one with your employer. If you currently dont work enough hours to get the employers pension, try to do so.

If you need an IFA, you can get one and he can be paid out of the pension money., If you dont know a good (independant) one, look at unbiased.co.uk

If it is a DB or final salary pension, try to leave it in his scheme under your name. It is more valuable staying there if you are allowed.

jamesd

If it is the pot of money type you can take 25% as a tax free lump sum when you reach age 55.

Under the proposed new rules it will be possible to ensure that you retire in penury by taking the rest from April 2015. The rest is taxed as normal income in the year in which you take it, to avoid paying higher rate income tax you should stagger it.

It is unlikely to be financially wise to pay off your mortgage as soon as you are able to get the lump sum. This is because the investments normally used with pensions on average grow more than mortgage interest rates, so you lose money every time you take the money out to reduce a mortgage.

You should also consider any savings tests for means tested benefits. Lump sums will become part of your saving as soon as you get them. Income is part of your income for means tested purposes, including the money taken from the remaining 75% of the pension pot.

IFAs can often be paid for out of the money you have in a pension pot. To help us to know whether it is worth using an IFA we'd need to know the amount, to within the nearest £20,000 or so. For pot sizes at the lower end of the size range we could just suggest reasonable options.