Stand Alone Widow's Pension

mgdavid

Ageing_Disgracefully wrote: »

You must have missed the bit where I said that I was married. Unfortunately that makes ME "the staff" as far as Mrs AD is concerned.

OK, in that case you'll need the extra cash if you outlive, as you'll have more free time :-)

SeekTruth

The OP's aim is to ensure that his wife would receive the same income should she survive him as he would receive should he survive her. All the suggestions above have attempted to meet this requirement by increasing the wife's income. An alternative approach, that would also meet the stated objective, is to decrease the OP's income.

The OP could either:
1. Make a commitment to give away £2500 a year for the rest of his life following his wife's death

or

2. To make it less likely that the giveaway is forgotten, actually start now giving away the money: if there is no favourite charity then I could provide details of a suitable recipient bank account.

atush

What kind of pensions do you have? Ie DC ones or DB ones?

kidmugsy

Ageing_Disgracefully wrote: »

For information, I am 58 and Mrs AD is 59.


Any suggestions gratefully received.

If your pension is DB, see whether it offers "allocation" whereby you give up a bit of your pension in exchange for her getting a bigger widow's pension.


For illustration:

http://www.nhsbsa.nhs.uk/Pensions/Documents/Pensions/Allocation_factsheet_both_sections_all_members.pdf

atush

And if DC, take the 25% TFLS and recycle it into your wife's pension.

kidmugsy

While you are both still earning why not contribute as much as you are allowed to into personal pensions? Then your wife can draw hers whenever she wants, and you can leave yours untouched for her to "inherit" on your death, under Mr Osborne's New World of flexibility.

Also check the new "heritability" of ISAs that Boy George has announced today: that may give you the effect you seek.

atush

exactly. Well said

Ageing_Disgracefully

Thanks guys for all of the suggestions. You have provided a number of options to think about.


To explain a bit more, I am a civil servant and have, for some time, been planning to use the allocation process to even out the position for me and Mrs AD on my retirement.


For the last couple of years I have been suffering from work related stress and taking medication (plus having to endure various "talking therapies"). A few weeks ago, as my stress levels and the effects continued to worsen, my GP said that I should take myself out of the situation.


After 6 weeks off work sick I informed my manager that, due to the noticeable difference in my health by being away from work, I had decided to apply for actuarially reduced early retirement.


Bizarrely (at least to my mind) my manager said that before he could accept my request, he has to consider ill-health retirement. If I won't apply for it myself then he will ask our occupational health advisors to consider it on my behalf.


My GP seems to think that due to the relatively short time that I have to go to my scheme pension age that it is likely that I will be given ill health retirement as, if I tried to return to work it is unlikely that my health would improve.


If I am granted the ill health retirement that I didn't want, then not only will I receive an enhancement of service increasing my own pension, but the option of allocating part of my pension to benefit Mrs AD will be removed under the scheme rules.

jamesd

Ill health retirement seems like the appropriate one to me. Given the time to normal retirement and medical recommendation it doesn't seem likely that you will be able to do the job for the rest of the time until normal retirement age for the scheme.

The announcement yesterday also had a mention that survivor's benefits from annuities would be paid tax free. I'm not clear at the moment whether that will apply to work-based defined benefit schemes like yours. If it does your wife may end up with a higher after tax income than while you are alive.

Investing within S&S ISA or pension seems like the best way to go to provide for your wife if that turns out still to be needed. This income can be taken while you are both alive or when only one of you is, with no reduction. Or it can be left to accumulate until you die or she does.

kidmugsy

Ageing_Disgracefully wrote: »

If I am granted the ill health retirement that I didn't want, then not only will I receive an enhancement of service increasing my own pension, but the option of allocating part of my pension to benefit Mrs AD will be removed under the scheme rules.

It's not very hard to see why people on ill health retirement aren't allowed allocation. Tell me, do civil servants get a tax-free lump sum on retirement?