McKechnie Pension Trust Limited - Pension PLan

Chime26

I also read something about Pension credit- would he be entitled to this as he is separated and is single?

sleepless_saver

Chime26 wrote: »

I also read something about Pension credit- would he be entitled to this as he is separated and is single?

Definitely not. His income will be far too high. http://www.ageuk.org.uk/money-matters/claiming-benefits/pension-credit/what-is-pension-credit/

xylophone

DWP are giving him the basic pension which is £115.95

The figure for Pre 97 Additional State pension is?

And the Contracted Out Deduction?

Chime26

xylophone wrote: »

The figure for Pre 97 Additional State pension is?

And the Contracted Out Deduction?

I have this written as
Addition state pension based to April 1997 is : NIL

Chime26

xylophone wrote: »

The figure for Pre 97 Additional State pension is?

And the Contracted Out Deduction?

And
Less contracted out deduction between 6th April1978 and 5th April 1997 : £63
Additional state pension based on earnings between 6th April 1978 and 5th april 1997: £53.82

xylophone

The COD is greater than the pre 97 ASP (probably because his GMP was revalued at Fixed Rate in deferment).

https://forums.moneysavingexpert.com/discussion/4532605

post 12

Each year the figure shown as pre 97 ASP is increased by CPI inflation. That part of the COD relating to pre 88 GMP does not increase while that relating to post 88 increases by CPI up to 3%.

Your father will only start to receive any pre 97 ASP when the ASP exceeds the COD.

With regard to transferring out of the DB pension, your father would wish to consider his position very carefully - I would only say that I have known people still drawing their DB pensions at 98, 95, 94 and 93.......

http://www.moneyobserver.com/opinion/pension-clinic-should-you-transfer-out-your-defined-benefit-scheme

With regard to taking the other two pensions, he should remember that sums over and above the 25% pension commencement lump sums will be taxed as income in the year of receipt.

Chime26

xylophone wrote: »

The COD is greater than the pre 97 ASP (probably because his GMP was revalued at Fixed Rate in deferment).

post 12

Each year the figure shown as pre 97 ASP is increased by CPI inflation. That part of the COD relating to pre 88 GMP does not increase while that relating to post 88 increases by CPI up to 3%.

Your father will only start to receive any pre 97 ASP when the ASP exceeds the COD.

With regard to transferring out of the DB pension, your father would wish to consider his position very carefully - I would only say that I have known people still drawing their DB pensions at 98, 95, 94 and 93.......

With regard to taking the other two pensions, he should remember that sums over and above the 25% pension commencement lump sums will be taxed as income in the year of receipt.

So how long would it take for the ASP to exceeds the COD.
He was actually not planning to transfer, but would he be better off?

He was planing to take the 25% £55900 and take £8,387 as his annual pension plus he would have his state pension which would be £578.80 per month.
He said he didn't want to completely retire and wants to wrk Atleast 2 days a week.
Plus the other 2 pension he wanted to cash out.

He is also divorce so what would happen to his DB pension pot if something was to happen to him? ( touch wood nothing will) would his daughters receive this?

xylophone

ASP/COD question - this will depend on the rate of inflation.

Defined Benefits pensions do not have a "pot" - they promise defined benefits at retirement eg 50% of final salary/widow's pension/death benefit etc.

As to what happens when your father dies, if he has no widow then clearly there is no widow's benefit and his daughters are presumably well past the age of being dependants so one would imagine the pension dies with him.

That said, he should consult the scheme booklet as some DB pensions can pay out a certain sum if the pensioner dies within five years of drawing the pension and may have other benefits specific to the scheme.

If your father is continuing to work, it might be wise for him to consider whether he wants to draw on his other pensions beyond his PCLS because of his tax position.

He should certainly check his tax code on retirement and in future years to make sure that he is not over or underpaying tax.

He might also wish to consider whether he wishes to defer drawing the state pension - see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/372517/dwp024-102014.pdf

http://www.moneysavingexpert.com/savings/state-pensions

If he does this, he should advise the administrators of the DB pension in case it should make any difference to the way his pension is paid.

All in all, your father has a lot to think about - if he needs professional advice, he might look here to find an Independent Financial Adviser.

https://www.unbiased.co.uk/

Chime26

How much does a financial advisor?

greenglide

That depends on what you want them to do.

If you want an IFA to even consider transfer of a Defined Benefit pension to a Defined Contribution one it is not going to be cheap.

Does he / you feel competent to invest this sum of money over many years rather than accept £13,613 index linked for the rest of his life?