pension question

jlpike

Hi I'm considering massively overpaying into my pension for a few years to take advantage of high rate tax and the current very good salary sacrifice pension I'm in.

I'm 40 and have a large mortgage with 23 years to go. I'd like to use the 25% tax free lump sum To pay this off at 55. Probably 90k by then.

I don't want to retire then or take the rest of my pension or an an unity At 55 though as I probably can't afford it.

Is this possible and do the new pension changes make aby difference?

Thanks

OldBeanz

Assuming the sums add up then as long as your mortgage provider is happy then nothing to stop you doing this. It is intended that the age to draw your pension will rise with mortality rates and that the age you can draw your pension rises with that age so you are probably going to have access to your pension nearer 60 than 55.

jlpike

Thanks OldBeanz

The problem might be that as you say the age you can access your pension will increase several times by the time I get there so I might not be able to do this until 60 by which time I will have almost paid my mortgage off anyway.

The other problem is im not sure I can afford to do this but have a cunning plan by doing it alternate years and the year im taking my full salary I put some money to one side to fund the next year when my take home will be much lower. I cant be the only person who has thought of this????

dunstonh

Is this possible and do the new pension changes make aby difference?

Its possible but the age is rising from 55 to 57 and then linked to 10 years less than state pension age.

CLAPTON

jlpike wrote: »

Thanks OldBeanz



The other problem is im not sure I can afford to do this but have a cunning plan by doing it alternate years and the year im taking my full salary I put some money to one side to fund the next year when my take home will be much lower. I cant be the only person who has thought of this????

how does that work compared to doing half each year

Pippajane1010

Hi sorry to jump on here but I can't see 'new thread' button. My ifa advised I move my three pensions into a sipp. Two went across fine, one was with my last employer. My old employer's pension people wrote to me asking permission before they would transfer it, but I didn't reply as was wAiting to hear from ifa about fees. I have since heard from my ifa saying 'your pension has now moved across to the wrap but I have mis advised you. It's an occupational defined contribution contract as opposed to a group defined contribution contract and we don't have permission to advise occupational transfers. We need you to sign the cancellation notice to new provider and the money will be returned to original fund at no loss to you. Can someone advise me here please, thanks

jlpike

CLAPTON wrote: »

how does that work compared to doing half each year

Didn't mention the other reason is to drop my salary below the 50k where my child benefit disappears.

I don't think I can afford to do it every year due to a large mortgage and car loans etc

xylophone

one was with my last employer. My old employer's pension people wrote to me asking permission before they would transfer it, but I didn't reply as was wAiting to hear from ifa about fees. I have since heard from my ifa saying 'your pension has now moved across to the wrap but I have mis advised you. It's an occupational defined contribution contract as opposed to a group defined contribution contract and we don't have permission to advise occupational transfers. We need you to sign the cancellation notice to new provider and the money will be returned to original fund at no loss to you.

See http://www.fca.org.uk/firms/financial-services-products/investments/pension-transfers

zagfles

The age is likely to be 57 or 58 for you - the govt have already announced plans to raise it to 57 around 2028 or so.

If you make big contributions you need to be aware of the annual allowance, carry forwards rules, pension input periods etc.

This gives a good explaination: http://adviser.royallondon.com/technical-central/information-guidance/contributions-and-tax-relief/annual-allowance/

hyubh

Pippajane1010 wrote: »

Hi sorry to jump on here but I can't see 'new thread' button.

It's a big blue one on the left above the list of existing threads.

dunroving

Pippajane1010 wrote: »

Hi sorry to jump on here but I can't see 'new thread' button. My ifa advised I move my three pensions into a sipp. Two went across fine, one was with my last employer. My old employer's pension people wrote to me asking permission before they would transfer it, but I didn't reply as was wAiting to hear from ifa about fees. I have since heard from my ifa saying 'your pension has now moved across to the wrap but I have mis advised you. It's an occupational defined contribution contract as opposed to a group defined contribution contract and we don't have permission to advise occupational transfers. We need you to sign the cancellation notice to new provider and the money will be returned to original fund at no loss to you. Can someone advise me here please, thanks

hyubh wrote: »

It's a big blue one on the left above the list of existing threads.

OP maybe was looking from within the thread rather than from the forum contents page. I was looking around and thinking, "I can't see it either!"