Pension Drawdown AVC

MaFurstDug

Hi, although the present SL plan does not support drawdown they have other similar risk level plans that do - as do other providers as you pointed out. I had thought that staying with SL would be more straight forward and less expensive than moving to another SIPP provider but will now try to gauge what options for investment funds and the cost of dealing with the provider. Thanks for the link.

My wife did obtain a pension forecast and because of contracting out fell short of the full state pension. We did consider at the time if it was cost effective to top up / buy back years and decided not to pursue this. However now you have reminded us of the option, and with the PCLS now becoming available we will look into this again.

The PCLS amount will probably breakdown as half to cash ISAs then some home improvements, holidays/travel, upgrade to a newer car, and depending on what remains a stocks and shares ISA.

Thanks for your input - it has made me consider my options in more detail.

Dazed_and_confused

We did consider at the time if it was cost effective to top up / buy back years and decided not to pursue this

Assuming this wasn't simply because you would be buying a tiny amount (pence) to get to the absolute max I'd be interest to know what you could see as a more effective investment?

MaFurstDug

At the time of my wifes pension forecast I had been unemployed for several years and still had 3 years until I qualified for state pension, so my wifes wages were our only income - and as she had to retire early due to health issues - we eventually had no income. We were depleting our savings each month to pay the bills. It was not the case that we were looking for a more effective investment - only that we didn't want to eat too deeply into our savings with what at the time was an expense we could do without. Now that our circumstances have improved we will revue her pension position. Hope this makes sense.

Dazed_and_confused

It does.

Buying years where you get the full £4.81/week is an excellent investment but be careful with the final year, you might have to pay the same amount to get just say £0.20/week. Not such a good investment if you're having to pay £700+ for it.

MaFurstDug

Thanks for the final year tip. We'll keep that in mind when we decide on our actions.

xylophone

You will find Royal London link in above helpful re NI top up.

grnglide

Note than the reference to "final year" refers to the year that you wife can reach the full pension amount.


The year in which she reaches SPa is generally referred as the final year and this part year (you don't and can't pay NI beyond your pension date) can never be a qualifying year no matter how much NI you pay.

DairyQueen

MaFurstDug wrote: »

My wife retired 3 years ago, she has an NHS monthly pension of £600 and has another 2 years to wait for her state pension at age 67.

Is your wife intending deferring taking the state pension? State pension age doesn't increase to age 67 until 2028. Those reaching state retirement age in 2021 will be age 66. The transition from 66 to 67 will begin in the year 2026.