How much to live on

[Deleted User]

scottish_lassy, what is your pension total looking like for the ages 60 to 67? Is there a lump sum also payable? Are you looking at a DB or DC pension?

scottish_lassy

What is a DB or DC pension????   I will get a small lump sum of £19000.  I have worked for a LA for the last 30 years in an administrative role.  Don't know if any of that helps.  VER being offered at work and I'm just waiting to see what they will offer.  I am divorced so have to run a house on one income which is a consideration.

MovingForwards

scottish_lassy said:

What is a DB or DC pension????   I will get a small lump sum of £19000.  I have worked for a LA for the last 30 years in an administrative role.  Don't know if any of that helps.  VER being offered at work and I'm just waiting to see what they will offer.  I am divorced so have to run a house on one income which is a consideration.

Defined benefit like a council / education pension. Probably what you have, check your paperwork.

Defined contribution where you can increase your % to get a bigger pension, again your paperwork will say if it's this.

My OH has just lost his job, but I was running the home on only my income anyway. 

Don't panic, just look critically at your outgoings and see what you can get rid of / swap for cheaper alternative.

Have a read through the debt free wannabe board for ideas as to where the fat can be trimmed. Read the old school section for budgeting ideas and other ideas. Read the diary sections to see how people are saving money on not large incomes.

[Deleted User]

Thanks scottish-lassy. If you work for an LA you will have a final salary pension also known as a defined benefit (DB) pension. This means the amount is guaranteed plus annual index linked rises that take infaltion into account. Is the lump sum you mention the redundancy offer? Or is it he lump sum from the pension? 30 years of of an LA pension should be pretty good plus another lump sum from that.

mark55man

if you get an offer from the LA of a pension £X or a smaller number with a lumpsum then be careful.  LGPS (the usual LA pension provider) are typically very poor so you are giving up income for not a lot of cash.  If you really need it then probably fine, but if you are just going to put in a savings account at 0% you will be costing yourself 

scottish_lassy

Barron Dale the £19000 is the pension amount - there would be a redundancy on top of that I presume.  Totally all new to me as I always thought retirement was years and years away.
Mark55man - my pension does offer a reduced monthly amount with a large lump sum BUT I did do a spreadsheet and worked out that probably wasn't worth it.

[Deleted User]

So the pension lump sum is £19000 and the annual pension is £6333? Or the pension £19000 and the lump sum £57000. If the latter you will be fine! Plus of course the redundancy payment.

[Deleted User]

mark55man, maximising the lump sum is another very personal thing. I maximised my teacher pension lump sum. I was able to pay off mortgage, clear all debt and have a very useful back up in investments and savings. As I was in the scheme for nearly 37 years the reduced pension was still adequate as I described in an earlier post on this thread. I also have no dependants. Also the lump sum is tax free.

otb666

Thank you Baron_Dale for your post yesterday we will have 100k severence which will clear mortgage and some, I did think about cashing in my pension like hubby which would have meant 120k now and 120k and 230k drawdowns but decided to have one pension in drawdown and one DB hopefully more tax efficient and safer, but who knows very reassuring to know we are not mad.  Only today got headhunted by firm for both hubby and me But decided we need a break we have both worked hard over the last year.  We will moth probably keep mortgage going and hold off paying off, as know we wont be able to borrow now easily

otb666

Thank you RetSol for your post on 31/1 (not yesterday) We have a son living at home maybe why bills are higher especially food, He returned from university and wanted to travel but will have to wait a while, we are happy to support him til he is ready The mortgage is fixed til oct22 repayment paid up in 9 years 8 months.When lockdown finishes thinking about moving as hubby wants to be by the sea But I am pretty sure he wont like it when we do go and have a look.  We will be sorted when SPA kicks in but just gotta fill the gap