To take a lump sum to put into savings account or not

Scot_39

Yes  thats right 20k allowance per tax year.

So get another 20k from Thurs 6th, but lose all of this years if not used.

hubb

Scot_39 said:

Yes  thats right 20k allowance per tax year.

So get another 20k from Thurs 6th, but lose all of this years if not used.

It was so easy to open a second account with Marcus. Thanks again for your help. I didn't realise there is a 250K limit, not 20K per year but obviously I will never have access to that type of money. One can only dream. 

Scot_39

Glad you were happy with terms.

The safest rule is to ignore the banks limits - it's million plus elsewhere - and stick with FSCS limits - currently £85000 per institution per individual.

If a bank collapses that's the max you are guaranteed back in theory (joint accounts twice).

But remember thats banking group - not individual bank name - I didn't realise Marcus included SAGA for instance till put them in at.

https://www.moneysavingexpert.com/savings/safe-savings/

I have stuck religously to it since the UK wings of the Icelandic banks collapsed.

I got money back twice within weeks.

hubb

I spoke to the Pension Protection Fund jst now and the reason for the decrease in the lump sum forecast is because of "factor changes". Obviously they couldn't give me any advice as to the future only to speak to a financial advisor. As we are only talking about 10k its hardly worth it really so I have to decide if I should cut bait and stick it in my Marcus ISA (now just turned 3.20%) or leave it and gain some back as the older I get before I take it, the more they add.

hubb

It has now dropped a little bit more to £10,946.95. Would you think this won't get any better over time ? I have the ISA account so it is really tempting wheil the rates are good. I could wait longer and the pension could drop further as well as savings interest rates.

hubb

Not why it has gone silent  here but I was thinking of perhaps transferring to another company who might give me a better return. I get plenty of mail with these offers from various companies. 

Sarahspangles

hubb said:

No more help here then 

I think you’re posting at a busy time of year - if you post with a title related to the new question I bet someone bites!  

hubb

It has dropped even more to £10,910 so I ask the question, what is the reward in taking your pension at a later age if the figure are constantly dropping ?

xylophone

I was thinking of perhaps transferring to another company who might give me a better return. 

Have you been given the booklet entitled

Welcome to

the Pension

Protection Fund

If not, you can download here

https://www.ppf.co.uk/our-members/what-it-means-ppf

You should read this carefully and note that it states (inter alia)

It’s important to remember that benefits cannot be transferred out of the PPF.

It appears that you were a member of a defined benefit pension scheme which entered PPF before you reached Normal Scheme  Retirement Age.

You therefore have a deferred pension within the PPF.

You are considering taking your pension.

If your old scheme did not have  a protected retirement age, then the earliest you  could do this  was age 55.

Assuming that NRSA for your scheme was not the age you have now reached (56), then if taken now, your pension will be reduced (see booklet).

You have used this service

https://www.ppfmembers.org.uk/en/FAQs/FAQQuoteAndRetire

Presumably the variation in Pension Commencement Lump Sum is owing to adjustment in early retirement factors.

https://www.ppf.co.uk/trustees-advisers/valuation-guidance/early-retirement-factors

The PCLS will be tax free but the monthly pension thereafter will be taxable income.

With regard to the PCLS, if you deposit the money in a standard savings account, the interest arising will be taxable income BUT you will have the PSA to set against this.

If you deposit the money in an ISA account, the interest will be tax free.

hubb

xylophone said:

I was thinking of perhaps transferring to another company who might give me a better return. 

Have you been given the booklet entitled

Welcome to

the Pension

Protection Fund

If not, you can download here

https://www.ppf.co.uk/our-members/what-it-means-ppf

You should read this carefully and note that it states (inter alia)

It’s important to remember that benefits cannot be transferred out of the PPF.

It appears that you were a member of a defined benefit pension scheme which entered PPF before you reached Normal Scheme  Retirement Age.

You therefore have a deferred pension within the PPF.

You are considering taking your pension.

If your old scheme did not have  a protected retirement age, then the earliest you  could do this  was age 55.

Assuming that NRSA for your scheme was not the age you have now reached (56), then if taken now, your pension will be reduced (see booklet).

You have used this service

https://www.ppfmembers.org.uk/en/FAQs/FAQQuoteAndRetire

Presumably the variation in Pension Commencement Lump Sum is owing to adjustment in early retirement factors.

https://www.ppf.co.uk/trustees-advisers/valuation-guidance/early-retirement-factors

The PCLS will be tax free but the monthly pension thereafter will be taxable income.

With regard to the PCLS, if you deposit the money in a standard savings account, the interest arising will be taxable income BUT you will have the PSA to set against this.

If you deposit the money in an ISA account, the interest will be tax free.

I understand that taking a 25% lump sum benefit will reflect in my monthly payments. My conundrum is will it be more beneficial taking at now, putting into my ISA account (interest earned being tax free) as the early retirement factors seems to be changing, in the wrong direction for me. I can't understand why though as interest rates are rising. I phoned today (and told again that their system is down, as it was 2 weeks ago and can't access my details) They said that there was a factor adjustment on the 1st March (when my £12.000 lump dropped to £10,000. BUT since then my lump sum forecast has dropped in smaller increments twice since then which makes me wonder what is going on.