Nat West Deferred Pension

jamesd

You might find that any IFA you ask about this tells you during the initial no charge interview that it's not worth considering. That will save you money and both of you time. These particular schemes are so good that it's pretty much a waste of your money to pay an IFA to check them out except for the reasons I gave earlier. You'd probably end up spending in the region of £2,000 in charges for a full evaluation job.

The insurance, though, can be useful and that is cheap. May well be cheaper than the whole IFA charge in fact. Not necessarily the best one to buy but it's easy to check and that's why I mention it: Aviva's online quote system.

atush

If you are worried about losing the pension if you die before taking it, and have a spouse/dependants, do look at Term insurance.

CathA

Thanks jamesd, Ive got a feeling that that will be the outcome. I'm contacting a few IFA's at the moment for an initial no charge discussion. I have no health issues, we're both working, my husband has pensions plus we both have work-place pensions that we are contributing to. Both of us have insurance and no debts apart from the mortgage and that's not very big. Thanks greenglide, I thought that was going to be the case, although I'll ring them anyway and let you know the outcome. Any further suggestions from anyone? Thanks.

CathA

greenglide wrote: »

You cannot transfer the pension into your old civil service scheme if you have left the civil service. You could have (and probably should have) transferred it when you started your employment with the civil service.

Hi greenglide, just spoke to civil service pensions and as we both thought, no it can't be transferred into there. Such is life.

SomeUser

I'm 99.9% sure that you would still get a spouse or dependents pension if you die before retirement. A spouses pension doesn't depend on death timing.

There would not be any lump sum payable if you die before retirement.


There are statutory death benefits (i.e. spouse's pension) in respect of post 88 GMP (and pre 88 GMP but widows get 50%, widowers get nothing).


I'm not sure if this is your Scheme Section, but see page 6 "death in deferment" http://www.rbspeople.com/content/microsites/rbs_people/rbselect/comparison_schedules/72288.pdf as an example.

mgdavid

CathA wrote: »

......... Any further suggestions from anyone? Thanks.

your finances appear to be on a very sound footing; try to worry less and enjoy money and life more :beer:

CathA

mgdavid wrote: »

your finances appear to be on a very sound footing; try to worry less and enjoy money and life more :beer:

Yes, my mother raised no idiots!! Thinking it through, and after some advice from an IFA today I think I'll be leaving it where it is. Thanks again.

CathA

SomeUser wrote: »

I'm 99.9% sure that you would still get a spouse or dependents pension if you die before retirement. A spouses pension doesn't depend on death timing.

There would not be any lump sum payable if you die before retirement.


There are statutory death benefits (i.e. spouse's pension) in respect of post 88 GMP (and pre 88 GMP but widows get 50%, widowers get nothing).


I'm not sure if this is your Scheme Section, but see page 6 "death in deferment
as an example.

Because I was only automatically enrolled in the widows and orphans plan for 1 year, his benefits are about £100 per year. On reflection, I'll leave it where it is. Thanks for your help, everyone.

CathA

jamesd wrote: »

You might find that any IFA you ask about this tells you during the initial no charge interview that it's not worth considering. That will save you money and both of you time. These particular schemes are so good that it's pretty much a waste of your money to pay an IFA to check them out except for the reasons I gave earlier. You'd probably end up spending in the region of £2,000 in charges for a full evaluation job.

I have taken on board everyone's advice, plus free advice from a couple of IFA's and am definitely leaving it alone. I've spent a long time over the past few weeks looking at pensions and have learnt a lot.
I have looked at my Personal Benefits Report 1988 which was issued from the bank, and calculated my pension will be approximately 2/3 of my final salary from the last year I worked there. I've looked through all the pension benefit forecasts that I've been sent over the years, and apart from a few quid here and there, the pension forecast amounts are pretty consistent, with a slight increase each time in the lump sum amounts.
However, the CETV amount has been quoted on each annual statement and there is a massive increase between the 2008 statement (the earliest one I have with a CETV) and the latest one (I'm talking about £35,000 increase).
Can someone explain this and what relevance it has to my final pension, if any?

SomeUser

Firstly, the closer you get to retirement, the valuable the pension is. The CETV is the actuaries' best estimate of how much it will cost in today's cash terms, to provide your benefits.

In simple terms, if the interest rate is 10% and you wanted to have £110 in one year's time, you would need to invest £100 today.

In pensions terms, if I'd promised to pay you £110 (lump sum pension) in one year's time I would need to have £100 invested now if the interest rate is 10%. In this case, the CETV would be £100. But if we were closer to retirement date, like 6 months away, I would need £104.88 invested at an interest rate of 10% to have enough money to pay your benefits, so with six months to go, the CETV is £104.88. But whatever the CETV is, you're going to get £110.

This process is known as discounting and the CETV is the "net present value" of your benefits. In pensions, the discount rate is always the interest rate.

Secondly, the assumptions (the guesses used for things like the scheme's investment returns which gives you the discount rate) get reviewed and updated every 3 years (ish).

The CETV amount has no effect on your final pension.