Retirment in 2016 advice please

doloresdavies

I will be retiring from work in 2016. I see the Government has a Pension Wise website for advice, but not for Final salary pension advice. I have two Options - 1: no lump sum and full quarterly pension. 2: a Lump sum and a slightly reduced pension. I need my State pension plus the Final salary pension to equal my current Monthly salary....and only THEN would I know how much Lump Sum to ask for. Should I see /talk to a Financial Advisor? Please can any advice be given in simple words?

[Deleted User]

Hi,

have a look here regarding a state pension forecast.

You should get detailed information from your employer regarding what you are entitled to.

xylophone

Have you requested a state pension statement?

https://www.gov.uk/state-pension-statement

RickyB2000

As others have posted, get a state pension forecast. In the meantime, what is the difference between your current annual salary and the full annual final salary pension?

doloresdavies

Hello there, I know my State pension will be in the region of £500 pm. I am in tied accommodation which I will have to vacate, my rent, electricity and water rates are not paid my me, but when I find a new home I will have to take these new bills into consideration. I take home about £1100 pm. So without looking at the utility bills....I need to get another £600 pm month coming in to equal what I'm currently getting, plus then I will have to increase this amount to cover the Utilities.

TadleyBaggie

In reality you only need 75-80% of your salary once you start taking a pension. The only deduction from a pension would be income tax, however from a salary there is also NI, pension contributions etc.

For example, I was on close to £60K pa. when I retired, to get the same monthly after tax income I only need about £42K pa. from my pension.

bigfreddiel

It seems you know the answer, because you haven't told us what your final salary pension payments and lump sum options are.

Tell us that and we may be able to offer some comments.

Are you sure about your sp being £500/month?

You say you need £1100 per month, so the answer is take a fsp of £600 and the rest as a lump sum.

Btw what will you do with the lump sum?

Is your fsp index linked? If so can you make the same return from your lump sum, or do you need it to spend?

Questions, questions, but it may help us all give you a more sensible answer

Cheers fj

RickyB2000

doloresdavies wrote: »

Hello there, I know my State pension will be in the region of £500 pm. I am in tied accommodation which I will have to vacate, my rent, electricity and water rates are not paid my me, but when I find a new home I will have to take these new bills into consideration. I take home about £1100 pm. So without looking at the utility bills....I need to get another £600 pm month coming in to equal what I'm currently getting, plus then I will have to increase this amount to cover the Utilities.

So what you are saying is you need £1100 a month net (I.e. Cash in your pocket after taxes). You need to convert this to the gross amount, as mentioned above, your current gross will probably be higher than you will need as you are probably contributing pension and NI you won't on your retirement income. Take the gross figure and subtract the £500 pension and the difference should be what you need your gross final salary pension to be.

Alternatively, if you know what the value of your two pensions are, there are plenty of calculators out there that will tell you what the net would be for someone not paying NI or pensions.

Then there is the detail of your pension itself - is it index linked etc. As noted above, plenty of questions that need answering.

saver861

doloresdavies wrote: »

I am in tied accommodation which I will have to vacate, my rent, electricity and water rates are not paid my me, but when I find a new home I will have to take these new bills into consideration. I take home about £1100 pm.

Not sure if I fully understand your point but, if you are taking home £1,100 currently with, rent, and utilities already paid then you are in fact taking home more than £1,100 per month.

Average gas and electric bill for a standard size house is around £100 per month. Water rates around £30 per month. Rent will vary considerably depending on area but will be certainly upwards of £300 per month. Say a round figure of £500 per month takes your effective take home pay to £1,600 per month.

xylophone

Earlier posts indicated that you were married - is this still the case?

You speak of a quarterly occupational pension which would be unusual unless the sum involved is very modest.

xylophone

Another thought, you mean that your state pension will be £500 every four weeks?