Wifes pension options.

margaretclare

maxie014 wrote: »

I agree gadgetmind it does matter.
But trying to get my head round it all takes a wee bit of time,nobody i work with has any interest in pensions,they just pay the avc and thats it.
Most of my friends are the same,no interest.
So ive got to learn myself and if i ask some daft questions along the way so be it,if you dont ask you dont find out as the saying goes.

Well done to you for thinking a little bit further forward than the end of your nose, which is not the case with other people you know. They will be sorry in time to come.

I know exactly what you mean. During most of my working life it was the same. The people around me, the women I worked with (in a female-dominated profession) mostly didn't give it a thought. Someone else would take care of it. I admit, it's a different generation now, but many of them are bitterly regretting the decisions they made, or failed to make, at a time when it mattered.

Now, in some ways it's worse. There are so many more distractions, so many inconsequential things to occupy mental space and time, so many more things to spend money on. You see them all the time, heads bent over smartphones, living in another world.

I would recommend to your wife that she starts either an ISA or a SIPP. Both have been recommended. If I could talk to her, I'd say 'do not leave it to someone else'. Not even a husband. Not the Government. Take charge yourself.

HTH

surbitonian

When it comes to pension advice, my advice would be to find yourself a good Independent Financial Advisor. Ours has been a godsend and we (wife and I) are both about to retire at 62 yrs of age. He has taken a far wider view of our finances than we would ever have done to ensure that we do not penalise ourselves by simply taking a pension too early. Well worth it.

atush

Yep, kinda like what we above were alluding to.

maxie014

Rang the pension dep today,this is what she told me.
If i decide to retire at 62 all my pre 2013 pension,24 years,i wont lose anything on it.
Post 2013 it will be 5% a year so 15% on 13 years.
I can take my avc at 62 and leave the main pension to 65 to avoid this.
Would this be a good way to go about things.
Avc to live on for 3 years from 62.Wife would be 59 and still working.
Main pension at 65,wife retires then at 62 if she wants to and uses sipp.
State pension at 67 for me.
She gets work pension and state pension at 65.

atush

All depends on how you can take the AVC. Probably wont be able to take it all tax free if not taking it with the main scheme. So 25% tax free, the rest taxed.

And you would want to take it in separate tranches so as to pay the least amt of tax.

Then there is the whole LS thing, you wouldnt really have one if you used the AVC at 62. Do you have lots of savings and investments?

A Sipp/PP could be better going forwards.

jem16

maxie014 wrote: »

She gets work pension and state pension at 65.

What age is your wife? You said she had at least 13 years till retirement which you say is 65. If that's correct she is only 52 so no way will she have her state pension at age 65. 1961 dob onwards is already 67 - may also be her LGPS date too.

maxie014

atush wrote: »

All depends on how you can take the AVC. Probably wont be able to take it all tax free if not taking it with the main scheme. So 25% tax free, the rest taxed.

And you would want to take it in separate tranches so as to pay the least amt of tax.

Then there is the whole LS thing, you wouldnt really have one if you used the AVC at 62. Do you have lots of savings and investments?

A Sipp/PP could be better going forwards.

A bit of savings but no more than 15k at the minute,been a busy and expensive time lately kids leaving school,driving lessons tests etc and one at uni.
Hopefully this should be over with in a years time so could hammer the savings a bit more by then.
I see what your saying about the sipp,ill ring the pension dep next week and see what the avc score is,i could always reduce my avc down and do a sipp each as well.

maxie014

jem16 wrote: »

What age is your wife? You said she had at least 13 years till retirement which you say is 65. If that's correct she is only 52 so no way will she have her state pension at age 65. 1961 dob onwards is already 67 - may also be her LGPS date too.

Cheers for pointing that out i didnt realise they put womens retirement age to 67!

atush

maxie014 wrote: »

A bit of savings but no more than 15k at the minute,been a busy and expensive time lately kids leaving school,driving lessons tests etc and one at uni.
Hopefully this should be over with in a years time so could hammer the savings a bit more by then.
I see what your saying about the sipp,ill ring the pension dep next week and see what the avc score is,i could always reduce my avc down and do a sipp each as well.

If you do a Sipp you may not have to hammer the savings (at least now) as you get tax relief and you dont need the money soon. The sipp will come with a 25% TFLS which can be your lump sum as well, but even if you ed that to bridge you gap- if you dont spend the AVC on the 62-65 gap, it will suffice as your tax free lump sum.

What you dont want to do, is spend the AVC 75% taxed, then take more of your DB pension as a lump sum- as the conversion rates tend to be dire.

So to spend the AVC you would have needed a good sized savings/investments pot to be your retirement lump sum

hugo15

I'm in a similar position. Does the tax credit automatically get added to the Sipp or do you need to do a tax return?