Ready for retirement

stephen0002002

I cant believe the times I change plans and thoughts.

Today I'm back thinking to transfer 1 or both FS pensions.
The TX values will be about 250000.

I could take 50,000 (25% free) and use most of that for income for 2 years and then maybe even consider an external annuity (if the rates were more reasonable then as kind of insurance.

Putting the TV (FSs) into a fairly low risk fund for the next a year or 2.
even if they didn't fair too brilliantly over next 2-3 years, I'd probably still be better off.

The 2 FS pensions together - if I take now (early) only pay about 9K pa. And I'm fairly sure I could get better annuity rates externally tbh.

We don't really need FS index linking or the spouses part that's built in.
My wife always has the PP (250,000) if anything happens to me.

stephen0002002

Interesting thing. I did an on-line quick quote for an annuity with Aviva.
By using the transfer-values of my 2 FS current pensions.
And it appears to give me a better income than my 2xFS work pensions.

2xFS (total)= 9K pa Aviva annuity = 12K

Im assuming this is due to no spouse pension.
And also the fact that ext annuity are more competitive.

LHW99

Im assuming this is due to no spouse pension.
And also the fact that ext annuity are more competitive.

Is it also a level annuity, because FS pensions tend to have index linking?

pip895

The level of increase seems to be very key - I have just had a play with the Aviva system.

For me :- DB pension 9200 (5% increasing)

RPI Annuity single life 9700
3% increasing pension £11300
No increase £19200
RPI Annuity including 50% Spouse pension (assuming same age) 8700

The difference between the annual 3% and RPI is interesting - they obviously don't believe inflation is going to behave long term!

stephen0002002

Yes, my FS's are indexed but also have the spouse pension.
But we don't need that part, as I have a P.Pension that wife will have.

TBC15

pip895 wrote: »

I have decided to go ahead but it wasn't black and white. The Critical yield was in fact very high - in the end it is the fact that we are not reliant on this money for our living expenses that swung it in our favor. If this had ben an uncapped index linked policy then I would have kept it.

uncapped index linked policy


What’s one of those and why would it have made a difference?

stephen0002002

For example. My FS is index linked it can go up to 4% year depending on RPI. But it is capped at 4%.

stephen0002002

I want to retire now, I'm thinking to take 1FS now but unsure
and do I take the lump sum ?

1 FS, (if I take now at 61.5) = £4588 or £3149 and £21,000 lump sum.
... or even may be defer it until 65 (my real retirement age).

I would like to pay off my debts this or next year (about £25,000)
( These are interest free cards int free is up next year ).

I could pay debt by using up some of my PP fund (250000).

The other option is to defer the 1FS pension until 65.
Its then £7600. (but 3,5 years away).

I'm thinking to take the FS now (early) w/o lump sum
and use the PP lump sum to pay the debts.

May I have your thoughts please.

pip895

My thought is that you are going to have to get professional advice anyway if you want to consider a DB transfer and they are likely to make a far better job of assessing the situation than anyone on here is.

I only transferred one DB policy and that was complicated enough. During the process they will get a lot more specific information on your schemes from the providers which can profoundly alter the eventual advice.

stephen0002002

Thanks for thoughts. I've just run a few model excels on this and thoughts are ...

1) With 2 FS pensions - transfer 1 to sipp (the higher TV one)
2) Take the int-free from the final (remaining) salary pension.
3) Take the final salary now and don't bother to defer 3 years.