USS - General discussion

ussdave

I think that's right.  Also keep in mind that any contributions that show as employer (e.g. from the original 1% match or if you are above the salary threshold) will likely be deducted to pay towards the other survivor benefits.  

Edit: the above is if you die in service so perhaps unrelated to your question, sorry

PJM_62

oh, ok. I wondered if it was transferred to them as a SIPP for them to hold in their own name / provider of choice.

I guess the cash payment method makes more sense.
But makes me think maybe I should transfer my IB out to a SIPP in my current S&S ISA platform.
Fees to pay there , but maybe a small price to pay for keeping things simple. 

Barralad77

Don’t think you can transfer your pension to someone else. The tax payable after 75 also applies to SIPP. I would keep it in the IB and avoid the fees (after you’ve taken out as much of it tax-free as you want).

mld66

mini850 said:

Maybe some of the DC is in Prudential MPAVCs? that might explain the disparity in the different numbers appearing in DC pot (where maybe only IB is shown?).

Anyway I agree with @MarlowMallard and @Nick_Dr1, in most cases taking full TFC (for whatever AP you decide to choose) seems to be a sensible option.

Yes there is £29,882 MPAVCs but these become part of the TFLS leaving the DC of £29,135 invested. 

mld66

My worry is that I know nothing about investing and if I take the max tax free lump sum I will have a big wodge of cash sitting in my bank account and very little idea of what to do with  it. so part of me thinks I should just leave the DC (and maybe MPAVCs invested - move the  MPAVCs across to USS?) - even though I will have to pay tax  on it once I draw it out. I'm kind of lurching between options 

max TFLS: AP=26,867; TFLS=£179,118; DC =0; MPAVCs = 0 or
                   AP=29,041; TFLS = 146,142; DC =0; MPAVCs = 0-or
                   AP=26,995; TFLS = 149,723; DC = 29,135 MPAVCs = 0 or
                   AP = 29,175; TFLS = 114,458, DC=29,135 MPAVCs = 0
                   AP= 29,105; TFLS = 85,907; DC = 29,135; MPAVCs = 29,882 (tax about £9000 for both pots together)
                    AP = 26,763; TFLS = 122,850; DC+MPAVCs = 59,017

Basically there's too much choice - I suspect in the end this will all end up much of a muchness but it's very stressful as I have to make my mind up in a week. 
I have one son who is 25 and independent so I guess from his viewpoint, leaving the money in the DC pot is sensible. 
if I want to take out the max TFLS of 180,000 plus I have about 80,000 savings- any ideas on what to do with it all? is a FA a good idea. I spoken to 4 so far and they just either show no interest  or are over enthusiastic which makes me suspicious. Thanks again

Barralad77

Too many options for any of us to work through…..

if I’m reading your numbers correctly, then with rounding up/down to numbers which we can all keep track of, it looks as though your standard pension is around £27k. This yields a standard TFLS of around £80k, with around £99k in the DC part of the pension.

If you avoid any commutation (and in your position, I would do that as the cost of a relatively small amount of extra annuity, which will be taxed isn’t especially attractive) then I think you have 3 options, effectively:

Take the annuity of £27k and then either-

[A] take £80k in tax-free cash and leave £99k invested

[B] take all £179k in tax-free cash

[C] somewhere between those two poles.

One question you could ask yourself is how you would use the money left invested. It looks as though you don’t have any need for it now, and that may be true for many years. If that’s the case, then leave it invested. It avoids the uncertainty that comes with moving it elsewhere, and presumably you’re on top of how it’s doing in terms of performance in the IB. If you’re happy with how it’s been doing in USS then you can avoid the uncertainty that might come with ‘jumping ship’ especially if, as you acknowledge, you’re not that au fait with the world of investing.

Don’t forget that it’ll only be taxed once you crystalize it, and that may be many years hence. A tax bill of £15,000 on a balance of £100,000 is one thing now, but in 20 years it will be much less of a hit. How long do you think you will hold on to the investments? You could withdraw any gains now and then to pay for something like a holiday, car, roof repair, but leave the bulk of it still invested.

Alternatively, if you think you might benefit from having an extra ‘as near as damnit’ £100,000 then take the cash now. 

If you really can’t decide between [A] and [B] above, then consider [C]. Split the difference and take £50k from the DC, leaving around £50k invested. That way, then if nothing else, you offset, somewhat, the fear of making the ‘wrong’ decision (alfhough I’m not sure there is a ‘wrong’ decision, here).

Good luck whatever you decide.

PJM_62

mld66 said:

My worry is that I know nothing about investing and if I take the max tax free lump sum I will have a big wodge of cash sitting in my bank account and very little idea of what to do with  it. so part of me thinks I should just leave the DC (and maybe MPAVCs invested - move the  MPAVCs across to USS?) - even though I will have to pay tax  on it once I draw it out. I'm kind of lurching between options 

max TFLS: AP=26,867; TFLS=£179,118; DC =0; MPAVCs = 0 or
                   AP=29,041; TFLS = 146,142; DC =0; MPAVCs = 0-or
                   AP=26,995; TFLS = 149,723; DC = 29,135 MPAVCs = 0 or
                   AP = 29,175; TFLS = 114,458, DC=29,135 MPAVCs = 0
                   AP= 29,105; TFLS = 85,907; DC = 29,135; MPAVCs = 29,882 (tax about £9000 for both pots together)
                    AP = 26,763; TFLS = 122,850; DC+MPAVCs = 59,017

Basically there's too much choice - I suspect in the end this will all end up much of a muchness but it's very stressful as I have to make my mind up in a week. 
I have one son who is 25 and independent so I guess from his viewpoint, leaving the money in the DC pot is sensible. 
if I want to take out the max TFLS of 180,000 plus I have about 80,000 savings- any ideas on what to do with it all? is a FA a good idea. I spoken to 4 so far and they just either show no interest  or are over enthusiastic which makes me suspicious. Thanks again

If you were happy with the USS 'do it for me' investment option, maybe take a look at the Vanguard Lifestrategy funds.

mld66

thanks everyone for you input - much appreciated