Non Reserve Pot advice

oshb5

xylophone wrote: »

Have you read post 12?
Just Read Ans12 and it is quite compelling.
I have only started down this road thinking about my own mortality Its 9years (might be 10now) till im due to retire however I have been ill for the last 10 years a triple bypass was 8 years ago which did not improve much at all and still left me with angina and pain under exertion and I had been getting gradually worse over the last 7 years, But this last year has seen a dramatic turn downwards in that from a year ago to being able to do everyday thing be it slowly or at a reduced rate to being unable to walk more than a few paces due to pain in back and legs and being out of breath it is even a effort to get up let alone to see the doctor when Im even dropped off outside the surgery door.

Your policy has two parts, the reserve fund ( set aside to pay your GMP at age 65- presumably the original GMP figure is revaluing at 7% per annum - you can check this with Aegon) and a non- reserved fund- does this fund have a GAR? Again, you can check this with Aegon.
I will give Aegon a call and ask them about the GAR and if there is one on the Non reserve part of my pension..

Do you really wish to depend on the opinion of a friend's FA when making a decision about your pension?
When I say Friends FA it is the FA he uses for his business Which my friend has said he has been a good FA and is the best one he has had in the last 24 years. Hence me approaching him and am about to sign a leter for him to take a look at my pension.

You might be better engaging an Independent Financial Adviser qualified in pensions who could also look at your position with regard to state benefits?
Like I said he is a registed IFA But he did say something about him not being able to give advice on state benefits? Weather that was in relation to pensions or as a whole.

Have you rung round to check a few regarding fees and service?
As said the FA fees with regards to my pensions come from the company he suggests placing the pension with for the enhanced Annuity if the form of a commission to him?

I will message back once I hear back from Aegon

regards Os

xylophone

Once you have your pension/lump sum/income options, you might approach a benefits adviser at CAB to check how any payments would interact with your benefits?

With regard to benefits, have you explored PIP?

https://www.gov.uk/pip/overview

Is your wife your carer?

http://www.nhs.uk/CarersDirect/carerslives/updates/Documents/means-tested-benefits.pdf

oshb5

Hi ALL

Iv spoke to Aegon Yesterday and asked about a GAR on the non reserve pot it took the guy a few mins but he came back and said that there is definitely NO GAR on it..

Wife is carer but we do not receive anything for her do to low rate care only. But something we have been looking into with how bad I am now But there is such a backlog...

Thank you all again for all the help

Regards Os

xylophone

I hope you will let us know how it pans out in the end.

Good Luck!

oshb5

xylophone wrote: »

I hope you will let us know how it pans out in the end.

Good Luck!

Yes I will do. And I have been having a think about things Such as the what if things. We dont need any money as such at the moment As we are steadily getting by.

As I was saying we could manage without the 25% at the moment Although it would enable us to pay the 2k CC off and possibly change the car to a Auto so I could drive more than a mile or two once more.
Its just that ONE- if we decide to leave the non reserve pot at Aegon and anything does happen to me then it immediately gets halved so even now that would be a loss of £15k God knows what the pot could be worth in 10 years time. and to loose 50% of that.
Or TWO- move it from Aegon to get enable getting a monthly income from it. Which when worked out by the first Company (Prime) After the initial (25% lump sum taken) a £21k investment paid in a 10 year period of £78 per month pay out and partners payment for rest of her life at £39 per month works out quite low For instance say I did only manage 10 years that would mean the partner who is 48 would have to be around for another 26 years after the original 10. Meaning she would be 84 before it even broke even. That is I mean if you had put the money in a box and took out those amounts each month But they would not be the case they would be getting interest on the pot to start with. would they not? So you can see my reluctance to go this way. can you not?..
I will ask is there any plans that run along the lines of you put in 30k you then take the interest grown on the original money input. Or is the pot not large enough to do anything like that? Or is there any other plans or scheme's that you could suggest. I just need as much info for when I have set u the initial meeting with a IFA as soon as I find a good one even if it means me having to travel a little further..

I only ask because from One and Two above it seams I am between a rock and a hard place does it not?

All the best Regards Os

P.S. You know what I said about if anyone has passed before their pension is due the benefits are halved for the spouse yes? well can I ask where do the other 50% got who gets that? Mine being relatively small at the moment is £59k made up of reserve and none reserve But in 10 years could be quite a bit more. Also I have friend who have been with worked at the same company as I was with before mu illness and are still with them and have 12 years to go and their pension todate is worth just under a quarter of a million and a Non reserve todate of £118.000

Then thinking out loud I said to him in two years when he is 55 That he could take it out and buy another property. Then live on the rent income. Plus the benefit was that he would still have his initial investment when and/or if he decided to sell the said property could he not

jamesd

oshb5 wrote: »

I will ask is there any plans that run along the lines of you put in 30k you then take the interest grown on the original money input. Or is the pot not large enough to do anything like that?

No problem to do that. It's called income drawdown and if you used investments you could probably take about 4% or so, adjusting up or down a bit every few years depending on how much you got. So maybe £1,200 gross a year and perhaps £150 a year to deduct from that in explicit charges, though that varies and lower is possible.

There's no halving on death if you use income drawdown. Your spouse gets the lot and can continue to take the same amount of income if they want to. When they die whoever they say should get it ends up getting the money.

oshb5 wrote: »

P.S. You know what I said about if anyone has passed before their pension is due the benefits are halved for the spouse yes?

Maybe. It depends on why they are halved. It's quite common for workplace final salary schemes to do that and if you choose to buy an annuity one of the spouse options is paying them a 50% income after you die. Or none, or 2/3 or all. The more they get, the less you get initially.

oshb5 wrote: »

well can I ask where do the other 50% got who gets that?

It was never there. The annuity company or employer worked out roughly how long the first person on average would live, added some more cost for paying out 50% for the extra time spouses on average live and used that to set the purchase price of the annuity income. So you would never have bought the missing 50% in the first place. The drop when you die, to 50% or nothing, is used in part to subsidise payments to those who live longer that you. That means that the initial rate for you and everyone else is a bit higher than it would otherwise have been.

oshb5 wrote: »

Then thinking out loud I said to him in two years when he is 55 That he could take it out and buy another property. Then live on the rent income. Plus the benefit was that he would still have his initial investment when and/or if he decided to sell the said property could he not

Yes, it's an option. A bit over-concentrated in just one investment, though.

oshb5

Quote:
Originally Posted by oshb5
I will ask is there any plans that run along the lines of you put in 30k you then take the interest grown on the original money input. Or is the pot not large enough to do anything like that?

No problem to do that. It's called income drawdown and if you used investments you could probably take about 4% or so, adjusting up or down a bit every few years depending on how much you got. So maybe £1,200 gross a year and perhaps £150 a year to deduct from that in explicit charges, though that varies and lower is possible.

There's no halving on death if you use income drawdown. Your spouse gets the lot and can continue to take the same amount of income if they want to. When they die whoever they say should get it ends up getting the money.

Hello Jamesd

The Above option is quite interesting saying that I was told. But the "Prime Company" If I took 25% of the 30k put the rest into an annuity I would receive £19.50 a week or £78 a month then after my wife getting 50% which is £936 and £468 respectively but then nothing at the end? I know that is on 22.5K
But working on your model and calcs above and scaling the £1200 gross down. It should give £900 then the deductions again if you said £150 (Although you did say less was attainable) would leave £750 which would give £14.42 a week
Which is only £5 a week less but still taking the £25% and the most important point is that the Initial investment would/should still be available in say 9, 1o or 14 years time (The 14 is my wifes expected retirement date) Plus Like I said we dont actually need any of the money (i.e. the 25% lump sum) at the moment so all the 30k could be used?
Is my estimation right in what I have taken from your working out and assumed Jamesd?.

If So I think I know which way I would like to go..And the next question is how would I go about doing it. Again would it through a IFA or ?.

Thank you again and every one else who has contributed info on this question. Has it looks to be coming to a nice conclusion..:T

Best regards Osh

jamesd

It's worth noting also that the 4% assumes increasing with inflation.

It's probably not worth using an IFA for the amount of money you have. Instead you could pick a mixture of funds to produce income. Some to start withi might be:

• Artemis Income and/or Invesco Perpetual Income (has a new manager so best not to go fully to this one at the moment)
• Invesco Perpetual Monthly Income Plus and/or Invesco Perpetual Distribution
• A commercial property fund that holds real property, no suggestions becuse I haven't looked at this in detail recently.
• A global tracker fund for the background growth long term to stay up with inflation.

Where you see Acc or Inc versions, pick the Inc version because that pays income into the cash part of your drawdown account. This way you'll have less need to sell investments to top that up. The frequency of payments varies from monthly to annual depending on the fund so you'll need some cash to smooth that out anyway.