How much to live on

scottish_lassy

Hello guys
I never expected this thread to go on for as many pages!!!!  My retirement is looming in the next 2-3 years and my question is whether to combine pensions.  My main pension is a LGPS and many moons ago I took out a small AVC (so that I could retire at 60, with everyone else!!!!).  Should I combine or just leave?

QrizB

scottish_lassy said:

Hello guys
I never expected this thread to go on for as many pages!!!!

I keep forgetting that this is your thread, and that you haven't quite retired yet

scottish_lassy said:

My retirement is looming in the next 2-3 years and my question is whether to combine pensions.  My main pension is a LGPS and many moons ago I took out a small AVC (so that I could retire at 60, with everyone else!!!!).  Should I combine or just leave?

There are some quirks (in a good way) with LGPS and AVCs, which often mean that you can take most of all of the AVC as a tax-free lump sum.

See for example this thread on the Pensions forum:

https://forums.moneysavingexpert.com/discussion/6626234/lgps-avc-25-tfls-calculation/p1

I hate to say this, but you might want to ask over there rather than here?

Plasticman

scottish_lassy said:

Hello guys
I never expected this thread to go on for as many pages!!!!  My retirement is looming in the next 2-3 years and my question is whether to combine pensions.  My main pension is a LGPS and many moons ago I took out a small AVC (so that I could retire at 60, with everyone else!!!!).  Should I combine or just leave?

If you have an AVC as part of your LGPS pension then you can take it as part of your tax free lump sum. Tax relief on the way in and tax free on the way out. It doesn't get better than that! I looked at the option of buying additional LGPS pension (APC) but the numbers just didn't stack up. It gets reduced if you're taking it early and then gets taxed. So I'll be taking my AVC as a lump sum. Hopefully in 20 months from now!!

[Deleted User]

scottish_lassy said:

Hello guys
I never expected this thread to go on for as many pages!!!!  My retirement is looming in the next 2-3 years and my question is whether to combine pensions.  My main pension is a LGPS and many moons ago I took out a small AVC (so that I could retire at 60, with everyone else!!!!).  Should I combine or just leave?

Good to hear from you. Are you able to update what your retirement figures are now looking like? I imagine they have changed since 2021! How is the monthly budget looking too? 

Albermarle

QrizB said:

scottish_lassy said:

Hello guys
I never expected this thread to go on for as many pages!!!!

I keep forgetting that this is your thread, and that you haven't quite retired yet

scottish_lassy said:

My retirement is looming in the next 2-3 years and my question is whether to combine pensions.  My main pension is a LGPS and many moons ago I took out a small AVC (so that I could retire at 60, with everyone else!!!!).  Should I combine or just leave?

There are some quirks (in a good way) with LGPS and AVCs, which often mean that you can take most of all of the AVC as a tax-free lump sum.

See for example this thread on the Pensions forum:

https://forums.moneysavingexpert.com/discussion/6626234/lgps-avc-25-tfls-calculation/p1

I hate to say this, but you might want to ask over there rather than here?

If you do then if you supply a bit more detail, such as which LGPS , who the AVC is with, and some actual numbers, you will be more likely to get a more definitive answer. 

Clowance

scottish_lassy said:

Hello guys
Imy question is whether to combine pensions.  My main pension is a LGPS and many moons ago I took out a small AVC (so that I could retire at 60, with everyone else!!!!).  Should I combine or just leave?

OH just had a free one hour with a local independant financial adviser as he is almost 65 and a final salary scheme insisted they had to pay out at 65, no flexibility (hes still working). Anyway this bloke suggested combining pensions to simplify, but I worry if the transfer value would be to our disadvantage. Worth checking out before you decide. In addition, I think the advisor was provided from a list by pensionwise but I could be wrong. Further consultations are paid, we will have him again nearer OH actual retirement in about 18 months. HTH

Bravepants

Clowance said:

scottish_lassy said:

Hello guys
Imy question is whether to combine pensions.  My main pension is a LGPS and many moons ago I took out a small AVC (so that I could retire at 60, with everyone else!!!!).  Should I combine or just leave?

OH just had a free one hour with a local independant financial adviser as he is almost 65 and a final salary scheme insisted they had to pay out at 65, no flexibility (hes still working). Anyway this bloke suggested combining pensions to simplify, but I worry if the transfer value would be to our disadvantage. Worth checking out before you decide. In addition, I think the advisor was provided from a list by pensionwise but I could be wrong. Further consultations are paid, we will have him again nearer OH actual retirement in about 18 months. HTH

You really need to consider several things with a Final Salary or Defined Benefit pension:

1. It is guaranteed income for life, completely passive you don't have to monitor it or adjust withdrawals. 

2. Is it uplifted each year by inflation (CPI or RPI)?

3. Are there any benefits the Final Salary scheme provides for a partner after the schemeholder's death? You would lose these with a transfer.

4. Most people on here would say "don't transfer"

Plasticman

Clowance said:

scottish_lassy said:

Hello guys
Imy question is whether to combine pensions.  My main pension is a LGPS and many moons ago I took out a small AVC (so that I could retire at 60, with everyone else!!!!).  Should I combine or just leave?

OH just had a free one hour with a local independant financial adviser as he is almost 65 and a final salary scheme insisted they had to pay out at 65, no flexibility (hes still working). Anyway this bloke suggested combining pensions to simplify, but I worry if the transfer value would be to our disadvantage. Worth checking out before you decide. In addition, I think the advisor was provided from a list by pensionwise but I could be wrong. Further consultations are paid, we will have him again nearer OH actual retirement in about 18 months. HTH

Transferring from a DB scheme isn't straightforward and would usually need to be signed off by a suitable financial adviser. Finding one who can do that is very difficult as the insurance that they have is very costly and most of the time transferring out isn't in the interests of the customer. It can cost thousands to get it agreed. I'd be asking the financial adviser about the process for that and likely costs.

Albermarle

In addition to the above two posts ( which I agree with) you can search the pensions forum for ‘ DB Transfer’ 
Be careful of the date of the thread though, as transfer values were much higher up until a couple of years ago . In some case they have reduced by up to 50%, making transferring out of a DB pension even less of a good idea.

[Deleted User]

I would say keep the DB pension. Nothing like a guaranteed pension income for life, especially if there is any form of index linking attached. Each to his own of course.

I am just very grateful that all my pension income is guaranteed for life with with index linking.It certainly removes any stress and uncertainty associated with income dependent on investments.

DB income may be seen as less flexible but as far as I am concerned it is something with which I can easily live.