Final salary pension closure

Wrighty69

I work for Tatasteel uk. Tatasteel have closed our final salary pension scheme and the funds future has not been decided yet. I have the option to transfer approx £500,000 out of the scheme into another scheme or leave it there, if I don't transfer it soon I may not be able to in the future. also the fund is going to have £500M put into it soon.
I am 47 and if possible I would like to get access to a pension at 55 due to health issues.
I am like a rabbit stuck in headlights at the moment and scared to make any move.

AlanP_2

I sympathise with your situation and hope it works out for you

To help people here provide comments and suggestions (none of us can ADVISE you what to do) it would help if we knew about your situation.

Married / Partnership? Any dependant children

Mortgage?

Is this your only pension?

What about other savings or investments?



You don't have to give exact figures if you don't want to but for example, if you said:

"I only have the money in my pocket, I won't be paying my mortgage off until I am 72, my other half doesn't work and we have 4 children under 16"

the suggestions and ideas on what to consider would probably be different to

"I have another pension that will pay me £10k a year from 65, my partner will get another £8k in 15 years times plus I have £200k saved and I have paid off my mortgage and have no family dependant on me"

Arshad_00

Wrighty69 wrote: »

I work for Tatasteel uk. Tatasteel have closed our final salary pension scheme and the funds future has not been decided yet. I have the option to transfer approx £500,000 out of the scheme into another scheme or leave it there, if I don't transfer it soon I may not be able to in the future. also the fund is going to have £500M put into it soon.
I am 47 and if possible I would like to get access to a pension at 55 due to health issues.
I am like a rabbit stuck in headlights at the moment and scared to make any move.

If rules dont change you will be able to access your pension @55(I assume). Try asking the administrator for a forecast. If you transfer out you will be shouldering ALL of the investment risk and paying around 1% for it to be managed by an IFA. I dont think TATA will be allowed (or want) to cut and run. I have a deferred pension(nearly twenty years) thats around £500k too, the fund is in deficit but a company that picked over the carcass of my old employer is working to reduce that.
I reckon @ 55 you're looking at £10k pa in todays money(that assumes your scheme is based on retiring at 65).
I assume you're still working(say £40k at Port Talbot), how does £10k sound at 55? Dont forget a nice redundancy pay off (if you get the chance).

Wrighty69

My wife (age 62) has retired and has a small personal pension of £240 a month, I own 2 rental properties that bring in about £700 a month after expenses, my own mortgage will be paid in about 5 years. No dependants as such, just two granddaughters that we like to spoil, and I only have this pension. No saving as I make overpayments on my mortgage.

Wrighty69

Arshad_00 wrote: »

If rules dont change you will be able to access your pension @55(I assume). Try asking the administrator for a forecast. If you transfer out you will be shouldering ALL of the investment risk and paying around 1% for it to be managed by an IFA. I dont think TATA will be allowed (or want) to cut and run. I have a deferred pension(nearly twenty years) thats around £500k too, the fund is in deficit but a company that picked over the carcass of my old employer is working to reduce that.
I reckon @ 55 you're looking at £10k pa in todays money(that assumes your scheme is based on retiring at 65).
I assume you're still working(say £40k at Port Talbot), how does £10k sound at 55? Dont forget a nice redundancy pay off (if you get the chance).

The pension is either going into the PPF or there is a new separate pension scheme being started that we can transfer our pensions into if we want. I would lose 50% if I took it at 55 and if/when it goes into the PPF the fund will drop by 10% so then at 55 I am down to approx. 45% of the full pension. There will be no more redundancies in Tatasteel UK, there is nothing to keep people there now so people will be leaving in droves as the pay is not good, I dream of 40K a year. My best years wages is from 21 years ago.

xylophone

Are you being offered Independent Financial Advice from a Pensions Transfer Specialist?

http://www.thisismoney.co.uk/money/pensions/article-4277998/I-m-Tata-pension-scheme-savings-out.html may be worth a read.

kidmugsy

Wrighty69 wrote: »

My wife (age 62) has retired and has a small personal pension of £240 a month, I own 2 rental properties that bring in about £700 a month after expenses, my own mortgage will be paid in about 5 years. No dependants as such, just two granddaughters that we like to spoil, and I only have this pension. No saving as I make overpayments on my mortgage.

If you gifted the properties to your wife she'd get the income tax-free until her State Retirement pension begins. Every little helps.

Wrighty69

kidmugsy wrote: »

If you gifted the properties to your wife she'd get the income tax-free until her State Retirement pension begins. Every little helps.

Sorry it doesn't work like that ( I wish it did though) , any rental property income is automatically split between a married couple, no matter which one owns them.


Also we have been offered advice by lighthouse, but we have to arrange it ourselves and only the first hour is free.

bigadaj

Wrighty69 wrote: »

Sorry it doesn't work like that ( I wish it did though) , any rental property income is automatically split between a married couple, no matter which one owns them.


Also we have been offered advice by lighthouse, but we have to arrange it ourselves and only the first hour is free.

Your understanding about the rental income is wrong, what you say is correct if in joint names but not if held solely by one individual.

You don't say how much your pension would pay currently, that a critical element. You'd expect the transfer to generate maybe £20k per year increasing with inflation and protecting capital if invested wisely.

You also need to get some savings and stop overpaying the mortgage, mortgage rates are low and with no savings you have very little flexibility.

kidmugsy

Wrighty69 wrote: »

Sorry it doesn't work like that ( I wish it did though) , any rental property income is automatically split between a married couple, no matter which one owns them.

If you heard that rubbish in the pub you'd be better off switching to a different pub.

Paul_Herring

kidmugsy wrote: »

If you heard that rubbish in the pub you'd be better off switching to a different pub.

And to save everyone else looking for it, Income Tax when you rent out a property: case studies

Property jointly-owned by married couples or civil partners
There are special tax rules for jointly-owned property for married couples and civil partners who live together.

The tax rules say that income from jointly owned property must be split and taxed in equal shares (50:50).

If you own the property in unequal shares, the income from it can be apportioned based on those shares and taxed on that basis. You would need to demonstrate and provide proof that you are entitled to receive income generated from the property in unequal shares rather than split 50:50.

To notify HM Revenue and Customs (HMRC), you should complete a declaration of beneficial interests in joint property and income (form 17).