Equity Release or Re-Mortgage to fund retirement?

bostonerimus

ashpan wrote: »

my pension is allocated as follows Cash 2%, fixed interest 24.5% property 9.8%, Uk Value and Income Equity 19.6%, Uk Growth 19.6%, Developed Markets Equity 24.5% (all PIM strategic passive) it has gained £7k in two years. Total Annual charge for the portfolio is .94% My advisor charges 1.9%

My ISA is invested with Met Life who have stopped taking further investments but IFA said its safe so not to move it.

So it looks like you are paying almost 3% in fees.......that's very high. If your adviser is charging 1.9% they are taking a great deal of advantage.

How is the MetLife pension invested/structured and how is your ISA invested.

jamesd

ashpan wrote: »

where can i find out more about how to invest in secured Bonds and what sort of return should i be looking for?

What do you mean by secured, bond and secured bond?

Secured generically means one or more assets that can be taken if the borrower defaults. The reliability of the security is a key factor. If it's shares in a small company hat's also the bond issuer it's almost worthless because failure to pay probably means the company is insolvent and the shares are then worth nothing. Near the opposite end is normal homes with sensible and easy to check valuations.

Bond largely just means something paying interest.

Secured bonds that you might see advertised are likely to have poor security and interest rates that are too low for the risk taken and you probably aren't yet capable of doing the analysis needed to determine if one happens to be decent, which is unlikely.

Bond in common parlance means term deposit account offered mainly by banks and building societies and those are completely safe up to the FSCS limit.

Bond in investment terms means government or corporate big company bonds and while not guaranteed if you buy a fund holding them, they are very reliable.

Peer to peer lending is where you can do secured lending and also read the views of others before investing. The deals still vary in quality, particularly depending on the P2P platform involved.

ashpan

jamesd wrote: »

Excellent! That means it should probably be first call to use your savings money, drawing on that to help fund the contributions.

Assuming crystalised benefits of £66,366 means that's the value used in the 25% calculation that means you could put in £22,122 of AVCs with tax relief and get all of that out tax free without reducing the defined benefit pension income.

I'm not sure how much longer you plan to work or how close you'll be able to get to fully exploiting this but it might be worth planning around it for when you stop work, if there's no great hurry.

However, I'm not an expert on the details of the LGPS and there are some real experts on it here who can correct and expand on the general description I just gave. If nobody adds something in a couple of days you might want to start a new discussion with LGPS in the title to attract those people, provide the LGPS details and refer to this discussion for the big picture.


There isn't normally any penalty for leaving an IFA these days, since they switched to a fee charging model. On older agreements they would often get commission for say five years and customers might have to reimburse that so they don't end up paying less than the full price for the service they originally received.

I think that both pension and ISA are in adviser-only products so you might need to transfer those.

Ive spoken to parmenion and the SIPP has to be registered with an advisor
so to clarify, i need to ascertain if i can withdraw around £22k from my private pension and put it into my LGPS as additional contributions so that i can then withdraw it as part of my school pension
If i start taking my pension whilst still working at the school (i might reduce my hours to 16 per week rather than retire) does this mean i can also take whatever the equivalent of the £22k would be as either an enhanced lump sum tax free or increased annual payments?

jamesd

ashpan wrote: »

so to clarify, i need to ascertain if i can withdraw around £22k from my private pension and put it into my LGPS as additional contributions so that i can then withdraw it as part of my school pension

Don't do it that way. There are rules which limit the recycling of pension tax free lump sums into new pension contributions. Doing 22k would exceed the most generous limit applicable to your amounts. The most generous limit applicable to you is taking £7,500 per rolling twelve month period, not tax or calendar year. So you could do that and use savings for the rest. Or 0% for purchase credit cards. Or some combination of savings and cards with no more than 7500 per rolling twelve months from pension tax free lump sums.

ashpan wrote: »

If i start taking my pension whilst still working at the school (i might reduce my hours to 16 per week rather than retire) does this mean i can also take whatever the equivalent of the £22k would be as either an enhanced lump sum tax free or increased annual payments?

I doubt you could take higher defined benefit income, not sure either on the rules about working after taking that scheme's pension.

If working part time that would prolong your ability to make high pension contributions and you should exploit that as long as you can.

sarahemmm

ashpan wrote: »

Im so grateful for the detailed and well informed responses ive received, i will go through them all carefully and add more info so that you get the answers to your own questions and can maybe pad out your responses
Its really encouraging to know there are well-informed folk out there willing to take the time to offer advice and information

THANK YOU!!

Just to let you know - I am in a very similar situation and have just retired. I first spoke to my IFA 3 years ago, and she assured me that I could retire immediately if I wanted to, even though I still had over £50k oustanding on the mortgage. I will be paying the remaining amount off shortly from one of my pensions, and drawing down around £1k/month from the other to supplement the income I get from my student lodgers. When I get to 66, I can stop taking lodgers unless I want the company.

So, best of luck, and enjoy your retirement!