NHS Pension Lump sum how to invest

Albermarle

Dazed_and_C0nfused said:

Also regarding the tax relieve £720 to be added - is this effectively free money from the government? In that case why doesn't everyone do that?

Not everyone has £2,880 available.

Or believes pensions are a great thing.

It locks money away till you are 55 (or later for some)

75% becomes taxable income when taken out so there is minimal gain (£180) for some and none if you are a basic rate payer now and higher rate payer in retirement.

Also from the questions we get on here, lots of people do not know about it . I would hazard a guess that out in the general population , the large majority are not aware of it , or as soon as pensions are mentioned they close their ears.

Also if you are relatively well off then maybe it is not worth the bother for £180. Also not advisable if you are over LTA limit.

jimpwarsop

Has your wife checked her state retirement pension ? She may be able to increase her SRP by £25 a week ish, for every extra year she buys.

jem16

jimpwarsop said:

Has your wife checked her state retirement pension ? She may be able to increase her SRP by £25 a week ish, for every extra year she buys.

A good idea but it would increase her state pension by £5.13pw for each year she purchases. It’s not as generous as £25pw. 

jim8888

If it's £100k, and you keep 20k in cash, then put £20k into a stock and shares ISA for both of you this year pre- April, and then do the same after April in the new tax year. That's your £100k invested. If you've already used your ISA allowance this year, then maybe just sit on £40k cash for a further year, maybe not a bad idea in the current market, until next April comes around. 

Pat38493

jimpwarsop said:

Has your wife checked her state retirement pension ? She may be able to increase her SRP by £25 a week ish, for every extra year she buys.

She is already fully accrued there.

Pat38493

jim8888 said:

If it's £100k, and you keep 20k in cash, then put £20k into a stock and shares ISA for both of you this year pre- April, and then do the same after April in the new tax year. That's your £100k invested. If you've already used your ISA allowance this year, then maybe just sit on £40k cash for a further year, maybe not a bad idea in the current market, until next April comes around. 

She wont' get the money till end of April but yes this is probably along the lines what we will do.

jem16

Pat38493 said:

jimpwarsop said:

Has your wife checked her state retirement pension ? She may be able to increase her SRP by £25 a week ish, for every extra year she buys.

She is already fully accrued there.

Have you checked by obtaining a state pension forecast? As your wife has been contracted out please don’t assume that 35 years plus will see her with a full new state pension. 

Pat38493

jem16 said:

Pat38493 said:

jimpwarsop said:

Has your wife checked her state retirement pension ? She may be able to increase her SRP by £25 a week ish, for every extra year she buys.

She is already fully accrued there.

Have you checked by obtaining a state pension forecast? As your wife has been contracted out please don’t assume that 35 years plus will see her with a full new state pension. 

If you mean by going on the .gov.uk website and looking at your future state pension entitlement, then yes it said she is entitled to the full amount and it can't be further increased.

jem16

Pat38493 said:

jem16 said:

Pat38493 said:

jimpwarsop said:

Has your wife checked her state retirement pension ? She may be able to increase her SRP by £25 a week ish, for every extra year she buys.

She is already fully accrued there.

Have you checked by obtaining a state pension forecast? As your wife has been contracted out please don’t assume that 35 years plus will see her with a full new state pension. 

If you mean by going on the .gov.uk website and looking at your future state pension entitlement, then yes it said she is entitled to the full amount and it can't be further increased.

Yes that’s exactly what I was meaning. Unfortunately I’ve come across many who didn’t get a forecast or who didn’t realise that they may still have to pay further contributions to receive that forecast. Just wanted to ensure your wife had checked. 

Korkyb

Is she taking the minimum lump sum or opting to take a bigger lump sum / smaller pension?

I'm in a similar position & been advised that unless I really need the lump sum or plan to peg it in the nearish furure then its better to take a larger pension & the minimum lump sum.