Help with pensions

xylophone

http://www.trwpensions.co.uk/deferred/when-can-my-deferred-pension-be-paid.php

Is this relevant to your husband?

With regard to the Phoenix pension, you say that he wishes to continue to contribute - if this is the case and he is going to draw down this pension, (take income) he may need to be careful of the MPAA.

http://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

Phoenix may not offer the flexibility he wants so he might need to transfer out.

He might benefit from an appointment with Pension Wise.

https://www.pensionwise.gov.uk/

ferox666

How much per month has he been paying into the Phoenix one?

sheilavw

hi thanks, doesn't work for Phoenix, hes HGV driver working 5 nights. Phoenix gross £11464 a month, he pays net amount of 91.68. Thought of leaving this running and asking other what options/offers are available. Just thought if can reduce to 3 nights it would top him up a bit on what wage he is losing.
Thanks everyone for all your help. We really have no idea on pensions!

atush

If the Phoenix pension is not an occupational pension, but a personal pension, he could take this pension and start a new one for contributions going forwards.

I would not take the DB pension early, reduced at 45-50%.

jem16

sheilavw wrote: »

hi thanks, doesn't work for Phoenix, hes HGV driver working 5 nights. Phoenix gross £11464 a month, he pays net amount of 91.68. Thought of leaving this running and asking other what options/offers are available.

Why would you want to leave this running when this is the ideal pension to be using?

How much is in this pension pot?

What charges is he currently paying on this pension?

You can then pay the £114.64 into a new pension. As the Phoenix one sounds quite old it's likely that he will get better charges on a new, modern pension.

Just thought if can reduce to 3 nights it would top him up a bit on what wage he is losing.

Then do that with the Phoenix pension and leave the DB pension alone till age 65 when he'll get much more benefit.

xylophone

You can get a personalised quote for taking the DB pension early but do not be surprised if the reduction is around 5% per year taken early - this would seem to be throwing money away?

Contact Phoenix and ask about the value of this pension and how it can be accessed and then come back?

sheilavw

Thanks everyone, will get a letter off to the Phoenix one and update you all

sheilavw

Thanks everyone for past replies. My Husband hasn't been good (dvt in calf, also very painful left knee) He has just returned to work after 9 weeks with note from GP recommending 3 days but they cannot accommodate him, he went back last wed and did 3 nights but finding it hard. He has decided to look for an alternative job 2 or 3 days a week.As stated previously he has a pension from when he was younger which grows each year so we intend leaving that. We sent a letter to Phoenix and have received a pack in August. at that time his policy is worth £39.594.83, options are as follows
Lump sum zero, annual pension before tax £1732.23 , no yearly increase, guarantee period 5 years, no spouse/dependant pension
tax free lump sum £9.898.71, annual pension before tax £1,280.45 , no yearly increase , guarantee period 5 years, no spouse dependant pension.
Next option same lump sum, £791.30 a year 3% increase a year, guarantee 5 years, no spouse dependant, last option same lump sum, annual income before tax £1,186.29 , no yearly increase, guaranteed 5 years. spouse pension 50%.
We have no mortgage, only debt is Husband's bike loan, probably owes at a guess 4k. I work full time so not badly off but thought option with lump sum could pay his bike off. This might sound thick but I assume if we take one of this we no longer pay his monthly sum of £91? We don't have much idea with this sort of thing. Anyone any idea which might work best for him?
Thanks
We do

atush

That is what THEY can offer. But other providers might offer more income, so you need to use the Open market option.

Easiest to use an IFA for this, esp if his conditions are likely to see him die earlier than the average. does he have High blood pressure? Does he smoke? etc.

Take 25% of the pot tax free, and the rest in an enhanced annuity, or use drawdown.

As far as his monthly payment, this can be put into a new personal pension to be taken later, or saved into high interest current accts, or into a stocks and shares isa.

kidmugsy

sheilavw wrote: »

We sent a letter to Phoenix and have received a pack in August. at that time his policy is worth £39.594.83 .... I assume if we take one of this we no longer pay his monthly sum of £91?

(i) If he transfers the pension to another suitable provider then they could offer him the possibility of taking 25% tax free (about £10k) and of drawing down the rest, 75%, at whatever annual rate would suit you. The sensible thing would be to draw it down slowly enough to make sure he never has to pay 40% income tax on any of it.

(ii) If he does decide to transfer it probably makes sense to stop the £91 payment, if only to wait until 16th March to see whether Mr Osborne's Budget is going to introduce a new reform whereby payers of 20% income tax will get a bigger rebate when they contribute to a pension. He might find himself being able to profit by drawing down from the existing pension and using part of the money to contribute to a new pension.

Under present rules, once he's started drawing down the taxable part of his existing pension he'll be limited to contributing at most £8k net p.a. to a new pension, which equals £10k p.a. gross. (That is to say, if he paid his pension provider £8k, the taxman would make it up to £10k).

He'll also be limited to contributing at most his annual earnings from his job: for example, if working three nights a week brought in (say) £12k p.a., then he'd also have a limit of £12k gross p.a. for contributions. The lower of the two limits is the one that applies, so in this illustration he'd be limited to £10k gross contribution (=£8k net, the amount he'd actually pay over to the provider).

It sounds as if these limits are large enough that they may not interfere with your actions much at all. Note that "p.a." refers to a tax year, running from 6th April to the next 5th April.