Paying more into employer pension scheme

AliceBanned

BTW JamesD looking at my latest LGPS pension statement it does state 'benefits can be drawn voluntarily at any time between 55 and 75'. Then there are a few statements that are confusing.


The scheme is run by Capita and has come under a lot of criticism for the administration side - now I understand why as there is so little info available!

atush

For the most flexibility i would:

After debt, build up a cash reserve of several K for emergencies, and then continue t build with 100 of your extra to save each month. You need this so you dont fall back into debt, and to provide a cushion.

Split your 400 left into S&S isas, and a DB/Avc pension with the LGPS. Why? Because this will provide a pot for you to pay out your TFLS w/o compromising/reducing your main DB pension. Should it ever get so large it will pay more than the 25% TFLS, then pay your DC contributions into a PP or Sipp from then on.

AliceBanned

Thanks Atush that makes sense.


Does it usually matter whether we transfer old pension pots into one? I have two pensions in one pot from previous employers, and the new LGPS one so presume best to keep that separate/get individual advice?


Thanks

AliceBanned

Agree the cash reserve is important to have first. I should be debt-free by around Feb-March 2020 so can start this then.

AliceBanned

I've tried phoning DWP, where my additional payments were made years ago, to check that this reached HMRC for my pension. I think it was for unpaid NI but I only kept one letter confirming that payments were up to date. It all went by DD so I have a record via bank accounts. I will have to try again to find out why I have to pay in another 15 years before I get full state pension.


I have looked at pension pot from previous employers (started age 38) and it has £76k and is invested in Standard Life 30:60:10 Glb Emg Mrkt Trk Vanguard Pension Fund. It is not at highest risk level but is fairly high and I'm ok with that at this point. I am thinking of making extra payments into this at some stage as the pension forecast (total) is probably not enough. I could get it up to around £19k per year including £44k tax free lump sum at 55.


As mentioned I am so new to this so would welcome any tips. I would take financial advice before doing anything major I think. But as I can take some cash out from 55 I think it might make best sense to save any extra in here (after having an emergency fund and paid off debt).?

AliceBanned

ps I should have said the majority is invested in the above fund - about 8% is in lower risk and a small amount in higher risk.

jamesd

nigelbb wrote: »

That's a sweeping statement that sounds very unlikely to me. Do you have some evidence to back it up?

Try Pension Trends – Chapter 4: The Labour Market and Retirement, 2013 Edition from ONS, no longer being updated by them. Table 4.13 may be most interesting, along with their observation that "51.9% of men aged 51 to 64 and 26.3% of women aged 51 to 59 had already left the labour market".

AliceBanned

I have made an appointment to speak to an advisor from PensionWise in two weeks' time. I spoke to DWP today and they said I have one more year's payments to make, after which I am guaranteed full state pension but will still be paying NI as long as I am working after that. I think it makes sense for me to start investing, for the tax savings alone. My aim is to work full time to maximum age of 60, and then part time if I'm not happy with what I have earnt and paid off. I may well still have a mortgage by then.


My current pot (previous employers) has charge of 0.349% per annum which I don't think is too bad? It seems to be performing well with growth of £30k over ten years, or is that not great? I will look into adding some savings to this or opening a new SIPP. I am looking at Hargreaves Lansdowne as friend experienced in investing recommended them, saying they are not the cheapest but he rates them quite highly.


Doing some reading up I think I would prefer a SIPP due to the wider choice of investments. I'm not averse to some risk at this stage for a few years.

AliceBanned

atush wrote: »

For the most flexibility i would:

After debt, build up a cash reserve of several K for emergencies, and then continue t build with 100 of your extra to save each month. You need this so you dont fall back into debt, and to provide a cushion.

Split your 400 left into S&S isas, and a DB/Avc pension with the LGPS. Why? Because this will provide a pot for you to pay out your TFLS w/o compromising/reducing your main DB pension. Should it ever get so large it will pay more than the 25% TFLS, then pay your DC contributions into a PP or Sipp from then on.

Thanks atush. Would a SIPP be any better than a stocks and shares Isa?

xylophone

BTW JamesD looking at my latest LGPS pension statement it does state 'benefits can be drawn voluntarily at any time between 55 and 75'. Then there are a few statements that are confusing.

But taking the pension before normal retirement age (correlates with SPA) would mean an actuarial reduction.

https://www.lgpsmember.org/more/reductions.php

Are you in EAPF? If so, you can download EAPF New Starters Guide on line.