noobie pension question

Paulrm71

Hi all

Apologies for perhaps a stupid question, but I know very little about pensions but need to get my act together as I plan to retire in 12 years.

Back in my earlier work years I worked for Commercial Union (merged several times since and now known as Aviva). I have approx 8 years worth of pension that has been sitting with them for twenty odd years. I now work for a local authority.

I would either like to transfer the aviva pension into my existing government pension, or self invest it in a Sipp. If it were possible to take it as cash this would be great as I could invest this in my s and s isa.

Please could I have your advice.

Thanks, paul

PeacefulWaters

Why do you want to change it?

What's wrong with it?

Paulrm71

I would just like it all in one place, so its easier to keep track of.

kidmugsy

The first thing to do is to tell us whether it is a Defined Benefit pension (e.g. a Final Salary pension), or a money purchase pension. Also: how old are you?

xylophone

If you were working for Commercial Union, you may well have a deferred Defined Benefits pension?

In that case, it might not be in your best interests to move it.

There is a time limit for transferring in to the LGPS - within a year of joining, unless your employer will agree otherwise?

http://www.lgps.org.uk/lge/core/page.do?pageId=102341

redbuzzard

Xylophone's is good counsel.

It's quite likely that the CU pension was DB if it is a good while back. In which case, it might well for example give you a guarantee of 8/60 of your final salary uprated by RPI from when you left until you retire. If that is the case it is unlikely that any projection would match it, and even then you could have lost the guarantee unless you can buy "years" in LGPS.

Act cautiously.

atush

And if you joined LGPS later than 11 month ago, you dont have time to change?

Seems to me you have 2 DB pensions, good on you!

Now find out what they will pay at scheme age. Ask yourself if you want to work that long. If not? Put money into a personal pension too. To live on until your DB pension payout- in Full.

PeacefulWaters

Paulrm71 wrote: »

I would just like it all in one place, so its easier to keep track of.

It's not exactly a hardship to have a handful of schemes on the go. An occasional benefits statement. What else?

As others have asked, what type of pension is the Aviva one?

You may well find that it's best left alone until the scheme retirement age. What is that age? It may well form the starting point of your early retirement plan.

Paulrm71

Thank you all for your replies so far.

It was a defined benefits pension. I am 43, but have already worked for a local authority for ten years, so I guess too late to transfer anyway.

There's a gap in my pension payments of about 7 years when I lived abroad (not officially working), so I would not be expecting a great pension anyway, especially if I expect to retire at 55.

Currently I own another house abroad (which I intend to retire to at circa 55), and at 55 my UK house will only have a small mortgage left. I also have a decent pot of money in an s and s isa which will remain invested until I am at least 55, probably longer if I live off the equity in my uk house when sold.

I would expect to draw down some of my pension pot tax free at 55, particularly if I retire abroad so that I can reduce taxation (the country of retirement is Thailand).

Paul

jem16

Paulrm71 wrote: »

I would expect to draw down some of my pension pot tax free at 55, particularly if I retire abroad so that I can reduce taxation (the country of retirement is Thailand).

Paul

With Defined Benefit pensions you won't be "drawing down" your pension pot. You will be entitled to a tax-free lump sum and a monthly pension as defined by the scheme rules based on your length of service and salary.

PeacefulWaters

Paulrm71 wrote: »

Thank you all for your replies so far.

It was a defined benefits pension. I am 43, but have already worked for a local authority for ten years, so I guess too late to transfer anyway.

There's a gap in my pension payments of about 7 years when I lived abroad (not officially working), so I would not be expecting a great pension anyway, especially if I expect to retire at 55.

Currently I own another house abroad (which I intend to retire to at circa 55), and at 55 my UK house will only have a small mortgage left. I also have a decent pot of money in an s and s isa which will remain invested until I am at least 55, probably longer if I live off the equity in my uk house when sold.

I would expect to draw down some of my pension pot tax free at 55, particularly if I retire abroad so that I can reduce taxation (the country of retirement is Thailand).

Paul

Speaking broadly, your ideal planning should be to take the benefits at scheme prescribed age. This is likely to be 60 or more. Collecting early usually penalises you heavily.

This means building up a pot that would fund the period between age 55 and DB scheme retirement age would make sense.