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Choice of providers for pension saving using salary sacrifice.

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Choice of providers for pension saving using salary sacrifice.

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crv1963crv1963 Forumite
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Background-

I have been giving serious consideration to taking my DB NHS Pension and then as I do not wish to stop working yet signing up with an agency to work in a similar post to my current one.

I have passed the NRA for my NHS Pension of 55 as this year I will be 57. I could work a further year and reach the maximum possible pension of 45/80 of final salary- but that may not be as beneficial to us as my taking the NHS Pension and starting to work agency and paying into a DC Pension.

My thinking is work 3 years agency- have my agency wage, my NHS pension and Mrs CRV wage as income for the 3 years in effect three salaries coming in. We could use the NHS Pension to fund our living costs, use the agency income to increase Mrs CRV SIPP to the equivilent of her take home pay and use the rest ongoing preparations for retirement- almost there with our home improvement savings and general savings fund.

The fly in the ointment is that agency income and NHS Pension would push me firmly into HR tax bracket. One way round this is to salary sacrifice into auto enrollment pension provided by the Umbrella company. IR35 rules means limited company is not an option.

The question- which would be better to SS into Aegon or Nest? Mrs CRV workplace pension is NEST and I think I'll be led towards Aegon but having looked at their websites I'm not sure which will be a better provider for me.
CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!

Replies

  • bowlhead99bowlhead99 Forumite
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    crv1963 wrote: »

    The question- which would be better to SS into Aegon or Nest? Mrs CRV workplace pension is NEST and I think I'll be led towards Aegon but having looked at their websites I'm not sure which will be a better provider for me.

    Which of the two has the choice of investments and cost structure that you prefer for your objectives?
  • cfw1994cfw1994 Forumite
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    I swear you were talking about retiring sooner than that: you sure you’re not being sucked into the OMY syndrome? :rotfl:

    (sorry, no useful input for you, but have a bump on the thread from me!)
    Plan for tomorrow, enjoy today!
  • cloud_dogcloud_dog Forumite
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    crv1963 wrote: »
    The question- which would be better to SS into Aegon or Nest? Mrs CRV workplace pension is NEST and I think I'll be led towards Aegon but having looked at their websites I'm not sure which will be a better provider for me.
    Sorry, but which organisation offers Salary Sacrifice?
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • MarconMarcon Forumite
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    Have you checked with the umbrella company you plan to use whether salary sacrifice is possible and if so, whether they will go with your choice of provider?

    If you are a higher rate taxpayer you can claim higher rate tax relief on pension contributions (to the extent that you've paid it) via your tax return or direct from HMRC.
  • crv1963crv1963 Forumite
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    Thank you all for your replies-

    bowlhead99 Aegon costs to purchase funds variable ongoing fee 0.5%, NEST initial fee 1.8% then ongoing fee 0.3%, choice of funds I'm still working my way through.

    cfw1994 I definately do not want to get sucked into the one more year syndrome! Once we go I don't want either of us forced back into the workplace. I do however enjoy mostly what I do for a living like every job it has its bad moments too!

    I wanted to retire completely May or June this year, but we sat and worked our real expenditure/ costs out yesterday and I have been working on two false lines i) what we actually spend and ii) what our savings will support in retirement. I underestimated spending and overestimated what our savings will support.

    To go before SPA our revised figures are-

    2k pm 24k pa= basic retirement (about 33% of current joint income)
    3k pm 36k pa= comfortable retirement (around 50% of Joint income)
    4k+ pm 48k+ pa= luxury retirement (around 66% of joint income)

    All after income tax figures.

    With a 60k savings reserve in case of a big market drop during drawdown and a 40k savings for large expenses over a 30-40 year period (possibly that needs increasing but we will also probably save with the two larger annual figures for holidays and cars).

    cloud_dog The Umbrella Company I am thinking of joining has from this month started offering salary sacrifice, for me having already reached 42/80ths NHS Pension and over NRA it appears to make sense to retire and return as agency, so benefiting from two incomes as opposed to working a futher 18 months to reach the maximum 45/80ths. SS down to BR tax level makes the most sense I think.

    I can then build a new DC Pot to drawdown at the same income level as my SP would be at age 67 so having a constant income level throughout retirement.

    Macron The Umbrella Company offers either Aegon or Nest both as SS, so it boils down to choice of provider/ funds. I have booked a telephone appointment with an IFA tomorrow to discuss provider/ fund choices.

    I appreciate we're fortunate but having discussed our expenses it is clear that although it is possible to retire this year it doesn't give us much in the way of lifestyle, our dogs alone cost us around 6k pa and although I know over the next 10 years they will pass on the reality is work with what you have now.

    I guess the lesson to learn is if you divorce in your late 40s then you either increase your savings rate or you work longer or both. An observation not a complaint. Each of us has to work with what we have and make choices that suit our needs and wishes- hoping that with a bit of planning it all comes together in good time.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
  • cloud_dogcloud_dog Forumite
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    crv1963 wrote: »
    I appreciate we're fortunate but having discussed our expenses it is clear that although it is possible to retire this year it doesn't give us much in the way of lifestyle, our dogs alone cost us around 6k pa and although I know over the next 10 years they will pass on the reality is work with what you have now.
    Have you considered different dogs ;)
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • crv1963crv1963 Forumite
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    cloud_dog wrote: »
    Have you considered different dogs ;)

    No choice of dogs is made and the option to choose a different one is currently closed. Have to take the rough with the smooth, ongoing costs this high have meant that I'll have to accept retirement this year is not an option.

    Vet bills do make you appreciate the NHS if there is a long term condition such as diabetes or critical condition such as cancer.

    But I do appreciate your humour!
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
  • cfw1994cfw1994 Forumite
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    & here’s me, half considering a retirement puppy after decades of no critters.....I might need to rethink that 😂

    Good luck, at least it sounds like your deliberations are....deliberate, & considered :beer:
    I *know* our (my!) spending is above where I know it could (& should) be....but nonetheless, decisions need to be made here, can’t put things off forever :rotfl:
    Plan for tomorrow, enjoy today!
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