Retirement.pension.saving help

callycutenose

I am 57 have 215000 saving and 126 pension pot and want to retire.Need advice on how to handle savings and pension. Looking at setting up pension with draw down and perhaps income bond with some of savings. However my friend said not to touch pension til 65 . Also I was thinking maybe to put some of saving into pension because 1 have not put in my full allowance past 3 years about 30000. Àny ideas will be much appreciated thanks

atush

215 savings is high- is it all cash?

What is your income this year? How much did you pay into pensions the last 3 years?

I would immediately pay as much into pensions are you are allowed (this will depend on this years income). As it will gain immediate TR.

As far as your friends advice, this is good advice if you have a dB/FS pension, but not if you have a 'pension pot' as you said which is a DC pension.

So, with the savings, i'd also look into S&S isas if you havent been using them. Buying income funds or investment trusts.

With nearly 350K in savings and pensions, have you considered an IFA?

xylophone

You might well benefit form personal advice http://www.thepfs.org/yourmoney/find-an-adviser/

Have you obtained a new state pension statement to help with planning for the future?

https://www.gov.uk/government/publications/application-for-a-state-pension-statement

HappyMJ

callycutenose wrote: »

I am 57 have 215000 saving and 126 pension pot and want to retire.Need advice on how to handle savings and pension. Looking at setting up pension with draw down and perhaps income bond with some of savings. However my friend said not to touch pension til 65 . Also I was thinking maybe to put some of saving into pension because 1 have not put in my full allowance past 3 years about 30000. Àny ideas will be much appreciated thanks

With that much at stake I would really only advise you to go and discuss your options with an IFA. It might cost quite a bit...maybe £1,000...but it will be well worth the time and money you spend to maximize your income over the next few years and still have a fair and reasonable amount left over when you're entitled to claim the state pension.

You could live off your cash for the next 8 years before needing to cash out any of your pension. You could continue to contribute something to your pension each year and claim the personal pension a little earlier. You have a lot to think about.

dunstonh

and perhaps income bond with some of savings.

That is a risky option for someone aged 57. The real terms loss of money over the next 30 years is likely to be significant and lead to capital erosion as at some point, you are likely to have to resort to eating your capital to make up for lower income.

When looking at income, there is no safe option. Just a collection of different risks. So, you cant treat cash savings as risk free. £215,000 paying an income would still have the statement value of £215,000 in 10 years time. However, the spending power of that money will be closer to £140,000. The income it generates will be lower in real terms too. You are looking at approx 30 years (possibly more). In 30 years, that £215k will be worth about £59k in spending power.

However my friend said not to touch pension til 65 .

A pension is no longer a product. It is a tax wrapper. The term "pension" can also mean different things. A lot of people do not understand pensions or realise that there are different types. So, what is right for one type of pension can be very wrong for another. You have access to the pension tax wrapper up to age 75 in respect of contributions and tax relief. it is not uncommon for pensioners to pay in every year right up to 75 to get that tax relief. The effectiveness will usually depend on their taxable income in retirement and future plans and objectives.

callycutenose

Thanks for all replies so far cally

zagfles

Might be worth a chat with Pensionwise - free govt guidance service for those looking to retire with a DC pension pot https://www.pensionwise.gov.uk

MrRee_2

I had a chat with an IFA .... with £250k cash and £500k Pension Pot he wanted to take £200k and put it somewhere at no risk which would give a 7% return and no tax to pay.

I wasn't born yesterday! The only place I know to get 7% is on Rental Property ... and that's not completely risk free and is certainly taxed!

It's a nightmare out there with 'experts' at every turn willing to take your pot and run with it ........ tread carefully!

atush

callycutenose wrote: »

Thanks for all replies so far cally

If you answered any of the questions asked, you might have gotten better information.

atush

MrRee wrote: »

I had a chat with an IFA .... with £250k cash and £500k Pension Pot he wanted to take £200k and put it somewhere at no risk which would give a 7% return and no tax to pay.

I wasn't born yesterday! The only place I know to get 7% is on Rental Property ... and that's not completely risk free and is certainly taxed!

It's a nightmare out there with 'experts' at every turn willing to take your pot and run with it ........ tread carefully!

Quite frankly I am not sure if you know the difference between an IFA, or an FA?

IFA 'experts' dont stay in business long if they dont make their clients safe or happy

jamesd

MrRee wrote: »

I had a chat with an IFA .... with £250k cash and £500k Pension Pot he wanted to take £200k and put it somewhere at no risk which would give a 7% return and no tax to pay. ... I wasn't born yesterday! The only place I know to get 7% is on Rental Property ... and that's not completely risk free and is certainly taxed!

It's readily possible to get that 7% and more via P2P lending without excessive risk. That isn't risk free or tax free so it can't be what the IFA was referring to.