Puzzled. How much will I get???

dunstonh

I am looking to get as much of this pension as I can, as soon as I can.

Why?

This is important as there is absolutely no point paying all that tax just to stick it in the bank or some other savings/investment.

Just seen too many people pay in all their life and not even reach pensionable age.

In which case, leaving it in the pension makes more sense then drawing it out as your wife will receive the full value tax free.

I fear you are letting a lack of knowledge and misunderstanding lead you to a bad decision.

dleafy

[In which case, leaving it in the pension makes more sense then drawing it out as your wife will receive the full value tax free. /QUOTE]

My dads pension “died with him” I’m led to believe and my mum got nothing after that. Would mine be different?

dleafy

There’s a woman just started at work who cashed in her pension and paid £14,000. She got £5,000 back by not paying tax the following year.
It’s all very confusing to those that don’t know! (Me)

dunstonh

My dads pension “died with him” I’m led to believe and my mum got nothing after that. Would mine be different?

It shouldn't have done unless his pension had ended and he bought an annuity on a single life basis. That did often happen in the past. However, not many people buy annuities any more. And the rules on annuities changed in 2015 to allow a greater selection of death benefits to be included.

If he had a defined benefit pension, his wife would have received 50% of income for the rest of her life.

Its unlikely you would use annuity and as yours has a fund value, that means it is not a defined benefit scheme. Pensions that invest in funds pay out the value of the fund on death to a beneficiary.

AlanP_2

dleafy wrote: »

[In which case, leaving it in the pension makes more sense then drawing it out as your wife will receive the full value tax free. /QUOTE]

My dads pension “died with him” I’m led to believe and my mum got nothing after that. Would mine be different?

If yours is a Defined Contribution pension (which it sounds like it is as there is a "pot" with Aviva) and his was Defined Benefit / Final Salary scheme then they are different, yes.

Unusual for a DB pension not to pay a surviving spouse pension at ~50% though.

Maybe he had a DC pot and purchased an annuity on a SINGLE LIFE basis i.e. until he died as opposed to a JOINT LIFE basis where your mum would have got a %'age of his pension for the rest of her life.

At the moment you have a pot, invested with Aviva in a pension wrapper. How and when you access that pot to provide a monthly / annual "pension" affects how much you get and what your spouse would get if you die before her.

AnotherJoe

dunstonh wrote: »

Or maybe better to point out the projections are flawed with current assumptions and the pension is not worthless.

Why not do both?

cloud_dog

dleafy wrote: »

I am looking to get as much of this pension as I can, as soon as I can.

As Dunstonh has commented.... Why?

Forget what you do / do not know about pensions, what other people have / have not done, what you consider to be 'best' for this pension (as you acknowledge, you don't know about pensions).

The 'why' is the crux of this discussion.

You can learn about options, and people here can offer opinions on choices etc as you move forward but, it is essential to understand why you feel you need to have this money now. Sometimes people can only see the picture of them having tens of thousands of pounds in their hands without realising the negative consequences.

AnotherJoe

dleafy wrote: »

Thanks for the input guys. It's really useful for someone like myself who hasn't a clue about pensions.
I'm currently working, have done since 16, earning £30,000 gross per year.
I am looking to get as much of this pension as I can, as soon as I can.

Unless you need it desperatelt, and even if you do need it desperately, that's idiotic and contradictory because you can either get as much as you can, or you can get it as soon as you can. You can't get as much as you can as soon as you can becaus if you get it as soon as you can, you'll get less than you can.
For example and without doing any exact calculations , it could go like this,
You can have £20k right now. Full stop. Or you could have £15k right now and £10k in April , or you could have £12k right now £10k next April and £10k following April. Would you really give up £12k for the sake of about 18months ? Unless you owe £20k to "Big Mick" that would be idiotic especially if all you will do is stick it in a bank account and not use it immediately.

This by the way is assuming you decide to take it and not keep the pension benefits which as Dunston has said will be much higher than the ridiculous assumptions in these pension projection (which ironically guide peopel like you towards making the wrong financial decision even though they were meant to do the opposite)

dleafy

I get where everyone is coming from and appreciate that your knowledge is greater.
If I’m honest, I guess I’m really thinking of getting the cash and enjoying the money while I can..... on holidays etc.
I always say I’d be happy to end my days watching daytime tv with no money left... lol.
So many people die before getting to enjoy their money it’s frightening to think you work all your life for nothing.
My uncle never crossed the door and left over £300,000 in his will. Seemed such a waste.

AnotherJoe

dleafy wrote: »

I get where everyone is coming from and appreciate that your knowledge is greater.
If I’m honest, I guess I’m really thinking of getting the cash and enjoying the money while I can..... on holidays etc.
I always say I’d be happy to end my days watching daytime tv with no money left... lol.
So many people die before getting to enjoy their money it’s frightening to think you work all your life for nothing.
My uncle never crossed the door and left over £300,000 in his will. Seemed such a waste.

And is your plan to spend that all in one go? If not, why would you take it out in one go and lose half of it??

Assuming you'd spend the £42k minus tax over more than one year it would be criminal to give Mr Hammond about £20k of it just so you can see a bigger number in your bank account for a short while.