Advice for taking small work pension.

Silvertabby

steve808 said:

Silvertabby said:

xylophone said:

If the pension increases by at least CPI in deferment then, yes, she's busted and will only have the options of an annual pension or a tax free lump sum and a smaller annual pension.

It seems that mother left service around 2008.

 The revaluation in deferment for excess over any GMP seems to be  RPI up to 5% for pensionable service pre 6 April 2009. 

https://www.yumpu.com/en/document/read/38784129/final-salary-section-sainsburys-pensions-website

Good point.  I used the public sector PI tables, which doesn't apply caps.  Inflation has been relatively low from 2008 to date, but OP's mum MAY just sneak in under the £30K limit.

Hope they update with the result!

As promised I am back with the result.

We were able to get a login to access the account online and I have a new 'Quote'

The option of the Trivial Commutation has now disappeared, so I think it's safe to say it's now over £30,000 (although it doesn't actually give me a total value of the pension).

The annual payments are now significantly higher than the old statement (which was actually 2018!)

The options now are to...
1- Take £1,700 per year (£141 p/m)
2- Take £8,000 tax free and £1,200 per year (£100p/m)
3- Transfer to another pension plan

I think the 2nd option looks ok, but my mother, being a pessimist, doesn't think she's going to live any more than another 10 years, even though there's nothing wrong with her, lol (there's no reasoning with her). And as discussed before my dad is 8 years older and has a good pension himself so wouldn't need the death benefits even if she goes before him (they would also be tiny anyway).

Therefore, she is now interested on Option 3!

So, as I understand it, she could transfer it all to a different scheme and then 'draw down' on that almost whenever she likes, likes £5,000 per year until it's all gone for example. Is that correct?

Also, I'd love to know (very roughly) how much money would get eaten out of the pension by a financial advisor and the new pension provider. If it's going to cost thousands I think that would put her off, but if it'll only be couple of percent, or less than a grand I think she'd like to do this option.

Thanks for reading.  

Thanks for coming back and updating us.

Before even thinking about option 3, check with them to ask if this is still on the cards in view of your mum's age.  It's possible that it was left in the letter in error.  If it's a 'no' then at least that simplifies your choices.

But your mum shouldn't celebrate just yet even if the answer is 'yes'.  You only need to look at some of the other threads on these boards to realise that getting a positive transfer recommendation will be virtually impossible.  And if she does find an IFA willing to look at this for her, she may find herself with a £5K fee just to be told that they don't recommend the transfer....

xylophone

so I think it's safe to say it's now over £30,000 (although it doesn't actually give me a total value of the pension).

I'd say you are correct - see p9 of the Guide referenced in my previous.

Your mother should check with the administrator if the value of her safeguarded benefits is over £30,000.

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Did your mother work for Sainsbury before 6/4/97? If so, when exactly?

If so, she will have a GMP.

See p19 of the Guide re increases in payment.

steve808

Silvertabby said:

steve808 said:

Silvertabby said:

xylophone said:

If the pension increases by at least CPI in deferment then, yes, she's busted and will only have the options of an annual pension or a tax free lump sum and a smaller annual pension.

It seems that mother left service around 2008.

 The revaluation in deferment for excess over any GMP seems to be  RPI up to 5% for pensionable service pre 6 April 2009. 

https://www.yumpu.com/en/document/read/38784129/final-salary-section-sainsburys-pensions-website

Good point.  I used the public sector PI tables, which doesn't apply caps.  Inflation has been relatively low from 2008 to date, but OP's mum MAY just sneak in under the £30K limit.

Hope they update with the result!

As promised I am back with the result.

We were able to get a login to access the account online and I have a new 'Quote'

The option of the Trivial Commutation has now disappeared, so I think it's safe to say it's now over £30,000 (although it doesn't actually give me a total value of the pension).

The annual payments are now significantly higher than the old statement (which was actually 2018!)

The options now are to...
1- Take £1,700 per year (£141 p/m)
2- Take £8,000 tax free and £1,200 per year (£100p/m)
3- Transfer to another pension plan

I think the 2nd option looks ok, but my mother, being a pessimist, doesn't think she's going to live any more than another 10 years, even though there's nothing wrong with her, lol (there's no reasoning with her). And as discussed before my dad is 8 years older and has a good pension himself so wouldn't need the death benefits even if she goes before him (they would also be tiny anyway).

Therefore, she is now interested on Option 3!

So, as I understand it, she could transfer it all to a different scheme and then 'draw down' on that almost whenever she likes, likes £5,000 per year until it's all gone for example. Is that correct?

Also, I'd love to know (very roughly) how much money would get eaten out of the pension by a financial advisor and the new pension provider. If it's going to cost thousands I think that would put her off, but if it'll only be couple of percent, or less than a grand I think she'd like to do this option.

Thanks for reading.  

Thanks for coming back and updating us.

Before even thinking about option 3, check with them to ask if this is still on the cards in view of your mum's age.  It's possible that it was left in the letter in error.  If it's a 'no' then at least that simplifies your choices.

But your mum shouldn't celebrate just yet even if the answer is 'yes'.  You only need to look at some of the other threads on these boards to realise that getting a positive transfer recommendation will be virtually impossible.  And if she does find an IFA willing to look at this for her, she may find herself with a £5K fee just to be told that they don't recommend the transfer....

Thanks Silvertabby. Do you mean she might be too old to be able to transfer the pension?

steve808

xylophone said:

so I think it's safe to say it's now over £30,000 (although it doesn't actually give me a total value of the pension).

I'd say you are correct - see p9 of the Guide referenced in my previous.

Your mother should check with the administrator if the value of her safeguarded benefits is over £30,000.

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Did your mother work for Sainsbury before 6/4/97? If so, when exactly?

If so, she will have a GMP.

See p19 of the Guide re increases in payment.

Yes she would have started in around 1990 and finished in 2014. Only ever part time though. Thanks for the info I'll have to look into this GMP thing.

Silvertabby

steve808 said:

Silvertabby said:

steve808 said:

Silvertabby said:

xylophone said:

If the pension increases by at least CPI in deferment then, yes, she's busted and will only have the options of an annual pension or a tax free lump sum and a smaller annual pension.

It seems that mother left service around 2008.

 The revaluation in deferment for excess over any GMP seems to be  RPI up to 5% for pensionable service pre 6 April 2009. 

https://www.yumpu.com/en/document/read/38784129/final-salary-section-sainsburys-pensions-website

Good point.  I used the public sector PI tables, which doesn't apply caps.  Inflation has been relatively low from 2008 to date, but OP's mum MAY just sneak in under the £30K limit.

Hope they update with the result!

As promised I am back with the result.

We were able to get a login to access the account online and I have a new 'Quote'

The option of the Trivial Commutation has now disappeared, so I think it's safe to say it's now over £30,000 (although it doesn't actually give me a total value of the pension).

The annual payments are now significantly higher than the old statement (which was actually 2018!)

The options now are to...
1- Take £1,700 per year (£141 p/m)
2- Take £8,000 tax free and £1,200 per year (£100p/m)
3- Transfer to another pension plan

I think the 2nd option looks ok, but my mother, being a pessimist, doesn't think she's going to live any more than another 10 years, even though there's nothing wrong with her, lol (there's no reasoning with her). And as discussed before my dad is 8 years older and has a good pension himself so wouldn't need the death benefits even if she goes before him (they would also be tiny anyway).

Therefore, she is now interested on Option 3!

So, as I understand it, she could transfer it all to a different scheme and then 'draw down' on that almost whenever she likes, likes £5,000 per year until it's all gone for example. Is that correct?

Also, I'd love to know (very roughly) how much money would get eaten out of the pension by a financial advisor and the new pension provider. If it's going to cost thousands I think that would put her off, but if it'll only be couple of percent, or less than a grand I think she'd like to do this option.

Thanks for reading.  

Thanks for coming back and updating us.

Before even thinking about option 3, check with them to ask if this is still on the cards in view of your mum's age.  It's possible that it was left in the letter in error.  If it's a 'no' then at least that simplifies your choices.

But your mum shouldn't celebrate just yet even if the answer is 'yes'.  You only need to look at some of the other threads on these boards to realise that getting a positive transfer recommendation will be virtually impossible.  And if she does find an IFA willing to look at this for her, she may find herself with a £5K fee just to be told that they don't recommend the transfer....

Thanks Silvertabby. Do you mean she might be too old to be able to transfer the pension?

Yes.  Most schemes don't allow transfers out once the member is within 12 months of normal retirement age, which is still 65 in your mum's case.  Only way to know for sure is to ask them.