Zurich pension advice please

judy2357

My partner will be 55 in May this year and has two Zurich pensions, one worth £35000 ish and the other £11000. He has been given an illustration on £46000 ish combining the two. Option 1. £11000 approx cash and a payment of £455 per year or an option 2 £650 ish per year. We know very little about pensions but does this sound about right please as £455 only works out as £37 per month?

Would it be advisable to leave it where it is for a couple more years and review the matter? Is is advisable to get as much cash as possible and invest it although interest rates are low? Any help would be appreciated, thank you in advance.

I should mention he is working at the moment although it is a temporary contract but has no plans to retire.

Linton

Something wrong somewhere. No way would he get as much as £650/month =£7800/year from a pot worth £46K. After all that would show a profit after about 6 years. And no way would he get only £455/year from £46K-£11K=£35K.

Are the annuities a fixed rate or index linked?

dunstonh

He has been given an illustration on £46000 ish combining the two. Option 1. £11000 approx cash and a payment of £455 per year or an option 2 £650 ish per month. We know very little about pensions but does this sound about right please as £455 only works out as £37 per month?

When consolidating pensions, the last thing you look at is the income examples. Projected pot using the same growth rates is one of the main considerations.

Would it be advisable to leave it where it is for a couple more years and review the matter?

General rule of thumb with pensions is that if you don't need it then dont commence the income. its not a 100% perfect but more a general guide.

s is advisable to get as much cash as possible and invest it although interest rates are low?

The pension is not subject to interest rates. What tax wrappers would you be using instead of the pension tax wrapper? i.e. it is already invested and within one of the most tax advantageous wrappers available. So, what would you be putting it in and why do you think that is better?

but has no plans to retire.

So, why commence the retirement income?

judy2357

Linton wrote: »

Something wrong somewhere. No way would he get as much as £650/month =£7800/year from a pot worth £46K. After all that would show a profit after about 6 years. And no way would he get only £455/year from £46K-£11K=£35K.

Are the annuities a fixed rate or index linked?

Sorry per year

judy2357

dunstonh wrote: »

When consolidating pensions, the last thing you look at is the income examples. Projected pot using the same growth rates is one of the main considerations.



General rule of thumb with pensions is that if you don't need it then dont commence the income. its not a 100% perfect but more a general guide.



The pension is not subject to interest rates. What tax wrappers would you be using instead of the pension tax wrapper? i.e. it is already invested and within one of the most tax advantageous wrappers available. So, what would you be putting it in and why do you think that is better?



So, why commence the retirement income?

This is what it says on the illustration - Purchase price £46796 which will give you either a tax free cash sum of £11699.24 plus an annuity of £455 each year with a partners annuity of £227 each year. OR An annuity of £614.88 each year with a partners annuity of £307.44 each year. The fund of £46796 used in this illustration represents 3.74% of the Standard Lifetime Allowance which is £1250000.

He is not definitely going to take his pension now but wanted to know the options as only on minimum wage and his job is temporary so just in case job situation gets worse it would be nice to know we have something to fall back on.

bigadaj

Might be worth your while getting in touch with pension wise. They can explain some of the jargon and options.

The rates you have been quoted look quite low and you are under no obligation to buy an annuity from Zurich, building up a pension pot and then getting a pension from that pot are different operations.

If you do decide that you need to draw in it then it may be worth speaking to an ifa who can look at the whole market and take the fee from your pot that the pension comoany would otherwise keep. It's not the largest pension pot but worth exploring.

As others have said its best left alone if you don't absolutely nesped to access it.

judy2357

bigadaj wrote: »

Might be worth your while getting in touch with pension wise. They can explain some of the jargon and options.

The rates you have been quoted look quite low and you are under no obligation to buy an annuity from Zurich, building up a pension pot and then getting a pension from that pot are different operations.

If you do decide that you need to draw in it then it may be worth speaking to an ifa who can look at the whole market and take the fee from your pot that the pension comoany would otherwise keep. It's not the largest pension pot but worth exploring.

As others have said its best left alone if you don't absolutely nesped to access it.

Thank you I have sent Pension wise an email, my partner isnt in any hurry but really hates dealing with financial matters but will look into it a bit more. I will ask around for a reputable local IFA as it might be worth a fee.