How to help my dad?

Throwaway1

Hi, my dad is 62 and has asked me if I would help him with his pension options. That's pretty much the whole conversation so far and I said I didn't know anything about pensions but would look into them and get back to him. From a starting point of zero I've done a lot of reading up about different types of pension, read Martin's Guide to Taking Your Pension and lurked through a few pages on here. My question to you is, what sort of things do I need to find out from him to help him? He doesn't know what he needs to know so I'm going to need some questions to ask him.

Off the top of my head, I think I need to know as a starting point:

* How many pensions does he hold and who are they with?

* Are they DC or DB? (I doubt he will know what this means but I'm certain they will be DC)

* What value are they at currently?

* How are they invested?

* What age is he planning on retiring?

* Does he want a lump sum or not? (I don't think he would need one as my parents have savings so would probably advise against this)

I'm probably in over my head with this but I'd like to understand more anyway as it's something that is important and will help my husband and I decide what to do with ours. In terms of my dad, he knows nothing about investing whatsoever and would most likely not ever want to know anything about it so that should help narrow down his options. He's a bit old fashioned and will probably only know of annuities so I suspect he may just want to go down that route but I'm very conscious that my mum has no pension (other than state) as she has been on disability payments all her life (that got stopped a few years ago, just as her state pension age got put back too but that's a rant for another time and place) so I'm concerned that if he does that and chooses the wrong option then my mum will be left with nothing if he dies apart from his Mineworker's Pension that I believe she would be entitled to 2/3rds of.

Please be kind, I know I haven't given much information (as I don't know much myself yet) and I will be back with more detailed questions once I know more. Thanks in advance for any advice.

Brynsam

If as you say these are DC pensions, the best way to help him is to suggest he sets up a free appointment with PensionWise to talk through his options: https://www.pensionwise.gov.uk/en

Throwaway1

Brynsam said:

If as you say these are DC pensions, the best way to help him is to suggest he sets up a free appointment with PensionWise to talk through his options: https://www.pensionwise.gov.uk/en

Thank you, that is a really good idea that I will definitely suggest to him.

xylophone

Mineworker's Pension 

This is a Defined Benefit pension.

If his other pensions are DC pensions, he might benefit from an interview with Pension Wise.

https://www.pensionwise.gov.uk/en

Your father would have the opportunity of choosing a joint life annuity to cover your mother should he predecease her.

Have both of your parents obtained state pension forecasts?

https://www.gov.uk/check-state-pension

Is your father still working/contributing to a pension?

Throwaway1

xylophone said:

Mineworker's Pension 

This is a Defined Benefit pension.

If his other pensions are DC pensions, he might benefit from an interview with Pension Wise.

https://www.pensionwise.gov.uk/en

Your father would have the opportunity of choosing a joint life annuity to cover your mother should he predecease her.

Have both of your parents obtained state pension forecasts?

https://www.gov.uk/check-state-pension

Is your father still working/contributing to a pension?

Thank you xylophone. When I mentioned his pensions most likely being DC earlier I'd actually forgotten about his Mineworker's one until I was thinking about what my mum was likely to do if she outlives him and remembered that he used to be a miner for around 10 years. I'm 100% certain they will have not obtained state pension forecasts, my mum was on disability from age 19 until 57 so her payments will have been covered by that I believe (I'll check) and my dad has never had any periods of unemployment except for the few years when he was on strike and directly after the pits closed so I think he should be ok for full but it's definitely worth making sure so thank you for that. Checking mine and my husband's I see we have 4 years gap from when we were at university so that highlights how something I never thought about can impact upon it.

My dad is still working and contributing at the moment. I think he will keep working until state retirement age and probably then leave. He's funny like that where even though there's no rule, he'll see that as the 'correct' way to do things.

Albermarle

To begin with I would not worry about what they are invested in , will he take a lump sum etc .
Just make sure you have all the details, paperwork etc and that you are not missing anything.
That includes the details about the DB mineworkers pension, which is probably the biggest one . You need to be familiar with the scheme rules , in case he wants to take it earlier or later , with or without a lump sum etc etc


In the meantime maybe a couple of useful pointers:
You do not have to take a DC pension on a specific date , or even at all . The money left in the pot will go to his beneficiaries on his death .
If your Dad has a good level of guaranteed income from the Mineworkers pension and then later the State pension it would normally be better not to then take out annuities for the DC pots , as if left alone or not fully used they can be passed on as said above.

squirrelpie

Your initial list of questions looks sensible to me. I'd suggest initially concentrating on trying to get hold of all the paperwork he has about the various schemes. Make a list of all the places he's worked and try to make sure you have some detail of the pension arrangements for each one. Once you have a full list of all the pensions you can start to extract details such as current valuations and scheme rules about dates, tax-free lumps, support for joint lives etc.

You'll also need to get some details of his other savings and his plans for when to retire and what he and his wife wants to do when they are retired (how much income they will need), then you can begin to think about how to arrange the various sources of income to meet those needs, or adjust their desires to fit the money available

Throwaway1

Albermarle said:

To begin with I would not worry about what they are invested in , will he take a lump sum etc .
Just make sure you have all the details, paperwork etc and that you are not missing anything.
That includes the details about the DB mineworkers pension, which is probably the biggest one . You need to be familiar with the scheme rules , in case he wants to take it earlier or later , with or without a lump sum etc etc

In the meantime maybe a couple of useful pointers:
You do not have to take a DC pension on a specific date , or even at all . The money left in the pot will go to his beneficiaries on his death .
If your Dad has a good level of guaranteed income from the Mineworkers pension and then later the State pension it would normally be better not to then take out annuities for the DC pots , as if left alone or not fully used they can be passed on as said above.

Thanks Albermarle, you're right that just getting all the paperwork straight is the most important first step. I'm having a little worry about his MPS now as I recall him saying something like 'I'm not bothered/worried (can't remember exact words) about that one, someone's looking into that for me, it's the other ones really' and I've just been seeing articles about people being convinced to transfer theirs in the 90s. I'm really hoping he wasn't one of those! I'm also not sure who this 'someone' is but he does like a good claim, having already had pay outs previously for vibration white finger and hearing problems so no doubt he will get any compensation should he be due it. Not being able to visit due to the current climate isn't helpful so I'd been putting off bringing it back up, which also gave me time to look into things a bit more, but I think we really need to have a chat sooner rather than later!

xylophone

It would seem that your father chose not to claim on MPS at normal scheme retirement age?
https://www.mps-pension.org.uk/my-pension-is-not-in-payment/your-benefits-at-retirement may be worth a look.

wjr4

Please make sure you check who he is speaking with re. his MPS. 

Things to find out for his other pensions: 
are there any guaranteed annuity rates, guaranteed minimum pension, protected tax-free cash, any penalties if he transfers, any other guarantees. 

Throwaway1

xylophone said:

I would seem that your father chose not to claim on MPS at normal scheme retirement age?
https://www.mps-pension.org.uk/my-pension-is-not-in-payment/your-benefits-at-retirement may be worth a look.

I don't know, I will check.