We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Maximising USS pension

124»

Comments

  • PJM_62
    PJM_62 Posts: 208 Forumite
    Part of the Furniture 100 Posts Name Dropper
    edited 25 November 2020 at 3:11PM
    AlanP_2 said:
    With the LGPS yopu have to transfer out of the DC scheme associated with the main DB pension if there is any residual after TFLS and you don't wnat to buy additional DB.

    Once transferred it is just a crystalised DC pot.
    Thats interesting.
    Do you mean transfer out of USS to something like Fidelity SIPP?
    This leaving just a DB pension with USS.
  • swindiff
    swindiff Posts: 978 Forumite
    Tenth Anniversary 500 Posts Name Dropper Newshound!
    Pretty sure that's what Alan means for the LGPS, yes.  I think the same will probably apply to the USS.  They charge no fees for administering your DC pension and only a couple of the funds have any charges at all.  So once you are no longer an eligible employee I can see they would be keen to get rid of you :)

  • AlanP_2
    AlanP_2 Posts: 3,539 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    That's right. Your DC pot associated with the DB scheme ends at the point you take the benefits.
  • taka
    taka Posts: 3,483 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    edited 25 November 2020 at 5:17PM
    I'm not sure that is the case with USS. From what I can tell you can leave any residual DC pot with USS. See this USS page (particularly the Using your Investment Builder Pot factsheet linked to at the bottom of the page) and this one too. Just be aware that the withdrawal rules are a bit clunky - it is lump sum (£2k min) max 4x a year (with only the 1st withdrawal a year being free - 2nd to 4th are £90 each time).
    Mortgage free as of 12/08/20!
    MFiT-5 no 45
    You can't fly with one foot on the ground!
  • PJM_62
    PJM_62 Posts: 208 Forumite
    Part of the Furniture 100 Posts Name Dropper
    taka said:
    I'm not sure that is the case with USS. From what I can tell you can leave any residual DC pot with USS. See this USS page (particularly the Using your Investment Builder Pot factsheet linked to at the bottom of the page) and this one too. Just be aware that the withdrawal rules are a bit clunky - it is lump sum (£2k min) max 4x a year (with only the 1st withdrawal a year being free - 2nd to 4th are £90 each time).

    After already taking max possible TFLS , can it be right that "the first 25% of each payment is tax-free"
    "Cash payments you take from your Investment Builder pot differ from the tax-free lump sum you can take when you retire – they’re subject to tax, so you’ll have to think carefully before taking your cash. If you take cash payments from age 55 but before your 75th birthday, the first 25% of each payment is tax-free. The rest is taxed as pension income."
  • PJM_62
    PJM_62 Posts: 208 Forumite
    Part of the Furniture 100 Posts Name Dropper
    Just dropped an email to USS for clarification on this.
  • ussdave
    ussdave Posts: 378 Forumite
    Sixth Anniversary 100 Posts Name Dropper
    Fairly sure that's written with the assumption that tax-free cash is just your 3 x annual salary lump sum, not the DC component.  
    I'm pretty certain you can transfer out any remaining crystalised DC amount to another provider if you have cash left over after your 25% TFLS.  
    @PJM_62 - what is the email address for queries btw?  I think I looked in the past and failed to find it.
  • ussdave
    ussdave Posts: 378 Forumite
    Sixth Anniversary 100 Posts Name Dropper
    Thank you :)
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352.1K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245.1K Work, Benefits & Business
  • 600.7K Mortgages, Homes & Bills
  • 177.5K Life & Family
  • 258.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.