FIREside Chats

edinburgher

@savingholmes - I think the door is closed for DB transfers 

@CCW007 - that is a little unusual - I bet the employer offers other "benefits" to help their staff fritter away the chance of a bigger pension  Is he able to pay more than the 10% via salary sacrifice? I found it a fantastic way to shovel money into my pension. Mrs E has it on her current workplace pension, but she can't contribute more than 20% of her wages

CCW007

@edinburgher there are definitely lots of options to spend on other than pension!  OHhas taken a few sensible options like life assurance and critical illness cover but there was so much choice.

We need to check if he can put more in - if not we will open a SIPP but OH is HR tax payer so would need to claim back the difference which would be a hassle, added to the NI savings mean it would be preferable to up his contributions on his workplace pension.  I think 20% would be a fantastic help towards our goals but it might feel like a big lump for him to sacrifice. 

ETA - interestingly that's just prompted me to work out what I put into my retirement pot.  Between LGPS contribution, AVC, SIPP and ISA I'm putting in almost 16% and I've just today upped by ISA payment to £250 so that will be 17%. 

I've never really thought about it - I just see my salary after LGPS contribution so it doesn't really feel like I've paid anything (I just look at it the same way as tax and NI as something which has to be paid before I get my salary) and the SIPP, ISA and AVCs have increased gradually over time it doesn't feel like I've "lost" any income.

edinburgher

@CCW007 - may I ask why you make AVCs? The main benefit to AVCs in our scheme (also a local government employee) is that you can take all the AVCs tax free assuming they're worth less than 25% of the total value of your LGPS rights + AVCs. Same for you? I don't  think this would work for me as I'd need to wait til 68 to access them.

CCW007

@edinburgher yes I'm in a scheme with the same benefits. 

I've only recently started paying AVCs, I was reluctant to do so because they cannot be accessed until the same age as the DB, I did explore whether it would be possible to access the pot earlier but it seems not so I'm only putting a bit in for the NI reduction really.  I based it on what was likely to be the pay increase this year but that still hasn't been agreed yet!

I would anticipate taking the entire pot as TFLS so I guess it would just be a nice bonus.  I'm not really sold on them compared to the SIPP (especially given the age to access) but it's a bit more diversification which I figured was probably good as my SIPP and ISA are with the same provider.

savingholmes

edinburgher said:

@savingholmes - I think the door is closed for DB transfers 

I thought it was hard but not impossible. I know I'd have to pay an upfront fee - but I thought it was still doable..? I have to wait until age 55 - but then I thought I'd be able to...

edinburgher

@savingholmes - chat on the pensions board suggests the ship has sailed - no providers who will accept transfers as of fairly recently

hugheskevi

edinburgher said:

@savingholmes - chat on the pensions board suggests the ship has sailed - no providers who will accept transfers as of fairly recently

Just to clarify - it appears no providers will accept transfers on an insistent client basis, ie, where an adviser has provided a recommendation not to transfer. If an advisor recommends a transfer there should be no problem.

Suffolk_lass

Also Money helper(.org) suggests you can no longer transfer an unfunded (normally public sector) DB unless it is to another DB Pension

edinburgher

@hugheskevi - thank you for pointing that out

becky_rtw

Question for those of you who have taken the plunge...How do you deal with changes to the financial set-up? 

I've always contributed at least half of everything and had my own money, but because I am younger than OH when I retire I'll be becoming more reliant on his pension income, its more than enough for both of us to live off, but I'm just trying to get my head around that. 

Do you think an "allowance" would work or do you all already have fully joint finances? 

We have a joint bills and stuff account but not a full joint account. We are totally open with money, but I've always been financially independent  and 'paid my way', so its probably more in my head than anything. I'll be bringing significant investments and cash, but my pension will always be small and not payable for another 28 years  

Anyway just musing it I guess as its starts to feel like more of a reality in the next year or two.