Success Stories - Pensions

savingholmes

justme111 said:

started saving about 10 years ago, aged 50 today, have about 130 k between pension and SS ISA. Got a terminal disease with a very bleak life expectancy (months but who knows) and it can be inherited by my daughter  who is 19 - nice to know she would not have immediate money pressure. Apart from it have about 8k/year in NHS pension from the ago 60  - I think some of it will be paid to her if I die and if I survive for a couple of years ( I think it is paid if I die till she is 21 or 22) I will nominate my partner to receive it/marry him so he has some survivor income.

Sorry life hasn't worked out a planned. Good you can see the silver lining.

justme111

just done expression of wishes - easy.
Life often does not work as planned
I have lived till 50 and have a 19y.o. daughter - far better than dying at 17 as some do ! 

LHW99

If you have a very short life expectancy, is there any possibility of the NHS pension being paid early unreduced? (Idon't know but someonehere might)

justme111

yes - you would need to stop working for it though which I do not want to for now  - while I can work why would not I - as if normal . If I can not work I definitely would look into it although I may not have time for it at all

darich

Got my first job at a local authority way back in 1990 when I was just out of school.

A few weeks later, someone put a form in front of me and told me to join the pension scheme. So I did.

Started off on a final salary pension paying 1/80th of my salary. Then it changed to average salary and the contribution also changed to 1/60th of my salary. A few years later it changed again to 1/49th of my salary.

I also started paying into my AVC pot in 2016 with around £50 per month. I’ve gradually increased that and it’s now a regular £200 per month although this year, I’m working on a site and getting a load of overtime so while treating myself to some goodies (like a BMW Z4 coupe and a load more camera gear), I’ve massively increased my AVC contributions this year, with several deposits of £500 and two of £900.

I’m currently 51 and based on projections to age 60, I’m projected to have a pension of £25k and 30k lump sum, along with 100k lump sum from my AVC pot.

My AVC pot is currently worth just under 20k with my contribution being under 15k, but with the tax benefit it’s cost me under 12k. So that’s a benefit of almost 60%.

My mortgage is just over 44k with 6 years to go, 5 of which are on a fixed rate of 2.49%. I’m fully expecting to pay it off when my fix ends and then I’ll increase my AVC payments by around £400 per month. So my AVC could well be higher than the current projection.

I’m fully expecting to retire at age 60 based on the above numbers.

barnstar2077

darich said:

Got my first job at a local authority way back in 1990 when I was just out of school.

A few weeks later, someone put a form in front of me and told me to join the pension scheme. So I did.

Started off on a final salary pension paying 1/80th of my salary. Then it changed to average salary and the contribution also changed to 1/60th of my salary. A few years later it changed again to 1/49th of my salary.

I also started paying into my AVC pot in 2016 with around £50 per month. I’ve gradually increased that and it’s now a regular £200 per month although this year, I’m working on a site and getting a load of overtime so while treating myself to some goodies (like a BMW Z4 coupe and a load more camera gear), I’ve massively increased my AVC contributions this year, with several deposits of £500 and two of £900.

I’m currently 51 and based on projections to age 60, I’m projected to have a pension of £25k and 30k lump sum, along with 100k lump sum from my AVC pot.

My AVC pot is currently worth just under 20k with my contribution being under 15k, but with the tax benefit it’s cost me under 12k. So that’s a benefit of almost 60%.

My mortgage is just over 44k with 6 years to go, 5 of which are on a fixed rate of 2.49%. I’m fully expecting to pay it off when my fix ends and then I’ll increase my AVC payments by around £400 per month. So my AVC could well be higher than the current projection.

I’m fully expecting to retire at age 60 based on the above numbers.

You have done great!  So well in fact that I would be tempted to retire earlier if you can.  What would you get at 57 for instance?  (I assume you will have qualified for a full state pension by then?)

Is it possible for you to not have a lump sum from the final salary and take an increased yearly amount?

You could also subsidise your reduced final salary with your AVC pot until your state pension kicks in.

My mum passed away at sixty nine, having only fully retired the year before.  I would love to be able to look back now knowing that she retired earlier and enjoyed life a bit before the off.

Silvertabby

barnstar2077 said:

darich said:

Got my first job at a local authority way back in 1990 when I was just out of school.

A few weeks later, someone put a form in front of me and told me to join the pension scheme. So I did.

Started off on a final salary pension paying 1/80th of my salary. Then it changed to average salary and the contribution also changed to 1/60th of my salary. A few years later it changed again to 1/49th of my salary.

I also started paying into my AVC pot in 2016 with around £50 per month. I’ve gradually increased that and it’s now a regular £200 per month although this year, I’m working on a site and getting a load of overtime so while treating myself to some goodies (like a BMW Z4 coupe and a load more camera gear), I’ve massively increased my AVC contributions this year, with several deposits of £500 and two of £900.

I’m currently 51 and based on projections to age 60, I’m projected to have a pension of £25k and 30k lump sum, along with 100k lump sum from my AVC pot.

My AVC pot is currently worth just under 20k with my contribution being under 15k, but with the tax benefit it’s cost me under 12k. So that’s a benefit of almost 60%.

My mortgage is just over 44k with 6 years to go, 5 of which are on a fixed rate of 2.49%. I’m fully expecting to pay it off when my fix ends and then I’ll increase my AVC payments by around £400 per month. So my AVC could well be higher than the current projection.

I’m fully expecting to retire at age 60 based on the above numbers.

You have done great!  So well in fact that I would be tempted to retire earlier if you can.  What would you get at 57 for instance?  (I assume you will have qualified for a full state pension by then?)

Is it possible for you to not have a lump sum from the final salary and take an increased yearly amount?

You could also subsidise your reduced final salary with your AVC pot until your state pension kicks in.

My mum passed away at sixty nine, having only fully retired the year before.  I would love to be able to look back now knowing that she retired earlier and enjoyed life a bit before the off.

In darich's case, he will have Rule of 85 protections in respect of his pre 2008 accruals - but this only kicks in from age 60.  Yes, he could  go at 57 - but his pension accrued from 1990 until  2008 would be reduced for early payment by quite a chunk.  And his accruals from 2008 to 2014 and 2014 to date of leaving would be further reduced by leaving at 57 instead of 60. 

No, the LGPS stopped offering inverse commutation some years ago.

AVCs can be transferred to a draw down scheme, but that would negate one of the main reasons for LGPS AVCs - tax relief in, tax free out (within HMRC limits).  If darich's AVC pot exceeds the HMRC limit, then the residue can be used to purchase additional fully index linked LGPS benefits.

My parents both died in their late 60s as well, so I do sympathise.

barnstar2077

Silvertabby said:

barnstar2077 said:

darich said:

Got my first job at a local authority way back in 1990 when I was just out of school.

A few weeks later, someone put a form in front of me and told me to join the pension scheme. So I did.

Started off on a final salary pension paying 1/80th of my salary. Then it changed to average salary and the contribution also changed to 1/60th of my salary. A few years later it changed again to 1/49th of my salary.

I also started paying into my AVC pot in 2016 with around £50 per month. I’ve gradually increased that and it’s now a regular £200 per month although this year, I’m working on a site and getting a load of overtime so while treating myself to some goodies (like a BMW Z4 coupe and a load more camera gear), I’ve massively increased my AVC contributions this year, with several deposits of £500 and two of £900.

I’m currently 51 and based on projections to age 60, I’m projected to have a pension of £25k and 30k lump sum, along with 100k lump sum from my AVC pot.

My AVC pot is currently worth just under 20k with my contribution being under 15k, but with the tax benefit it’s cost me under 12k. So that’s a benefit of almost 60%.

My mortgage is just over 44k with 6 years to go, 5 of which are on a fixed rate of 2.49%. I’m fully expecting to pay it off when my fix ends and then I’ll increase my AVC payments by around £400 per month. So my AVC could well be higher than the current projection.

I’m fully expecting to retire at age 60 based on the above numbers.

You have done great!  So well in fact that I would be tempted to retire earlier if you can.  What would you get at 57 for instance?  (I assume you will have qualified for a full state pension by then?)

Is it possible for you to not have a lump sum from the final salary and take an increased yearly amount?

You could also subsidise your reduced final salary with your AVC pot until your state pension kicks in.

My mum passed away at sixty nine, having only fully retired the year before.  I would love to be able to look back now knowing that she retired earlier and enjoyed life a bit before the off.

In darich's case, he will have Rule of 85 protections in respect of his pre 2008 accruals - but this only kicks in from age 60.  Yes, he could  go at 57 - but his pension accrued from 1990 until  2008 would be reduced for early payment by quite a chunk.  And his accruals from 2008 to 2014 and 2014 to date of leaving would be further reduced by leaving at 57 instead of 60. 

No, the LGPS stopped offering inverse commutation some years ago.

AVCs can be transferred to a draw down scheme, but that would negate one of the main reasons for LGPS AVCs - tax relief in, tax free out (within HMRC limits).  If darich's AVC pot exceeds the HMRC limit, then the residue can be used to purchase additional fully index linked LGPS benefits.

My parents both died in their late 60s as well, so I do sympathise.

Thank you for your explanation.  We still have some people on the old DB scheme at work, and they have found their pensions to be along the same lines, great in the long run, but not very flexible.  DC schemes may not be as good, but you do have options.

darich

barnstar2077 said:

darich said:

Got my first job at a local authority way back in 1990 when I was just out of school.

A few weeks later, someone put a form in front of me and told me to join the pension scheme. So I did.

Started off on a final salary pension paying 1/80th of my salary. Then it changed to average salary and the contribution also changed to 1/60th of my salary. A few years later it changed again to 1/49th of my salary.

I also started paying into my AVC pot in 2016 with around £50 per month. I’ve gradually increased that and it’s now a regular £200 per month although this year, I’m working on a site and getting a load of overtime so while treating myself to some goodies (like a BMW Z4 coupe and a load more camera gear), I’ve massively increased my AVC contributions this year, with several deposits of £500 and two of £900.

I’m currently 51 and based on projections to age 60, I’m projected to have a pension of £25k and 30k lump sum, along with 100k lump sum from my AVC pot.

My AVC pot is currently worth just under 20k with my contribution being under 15k, but with the tax benefit it’s cost me under 12k. So that’s a benefit of almost 60%.

My mortgage is just over 44k with 6 years to go, 5 of which are on a fixed rate of 2.49%. I’m fully expecting to pay it off when my fix ends and then I’ll increase my AVC payments by around £400 per month. So my AVC could well be higher than the current projection.

I’m fully expecting to retire at age 60 based on the above numbers.

You have done great!  So well in fact that I would be tempted to retire earlier if you can.  What would you get at 57 for instance?  (I assume you will have qualified for a full state pension by then?)

Is it possible for you to not have a lump sum from the final salary and take an increased yearly amount?

You could also subsidise your reduced final salary with your AVC pot until your state pension kicks in.

My mum passed away at sixty nine, having only fully retired the year before.  I would love to be able to look back now knowing that she retired earlier and enjoyed life a bit before the off.

I would love to retire a bit earlier and even though I wasn't aware of the additional hit on my pre 2008 contributions, the reduction was a bit large to swallow. Yes, it would be feasible, but right now I have absolutely no financial worries, can spend decent money on luxuries and save decent money every month. Retiring earlier could mean I have too large a reduction in my income. Even retiring at 60 is pretty good. My wife is about 5 years older than me and even though she earns less and will have a smaller pension, our combined pensions, when we both take our state pension, would be around 55k although that's a bit off for me. That's based on a state pension of 10.6k, which I think she may already have qualified for, and I will qualify for in about 3 years. We always ignore any inheritance because you never know when it'll happen. We could both potentially receive around 50k each but it's never included in any projections.

So while earlier retirement would be good, 60 is by no means bad, and I'll not be struggling by any stretch.

Workerbee999

2024 will be a year of change. Our pension planning has the luck of DBs as well as loads of helpful tips from these threads. OH will retire next summer when he turns 54. He has a DB of £40k plus 3x lump sum, at 63. Once we paid off the mortgage we invested in a SSIP for him in a global tracker now at £85k, and will use salsac this FY and early next to create a tax-free AVC attached to the DB. We learnt from this site the benefit of cheap trackers and having a SSIP to provide TFLS and annual values of personal allowance until the DB starts. It would have been more efficient to start the SSIP earlier instead of clearing the mortgage but at the time we wanted the security.

I’m still working to 55 at the end of 2025 and am happy with that. Until OH retires we have been living on one salary and saving the other towards “the Plan”. We won’t be saving anything once he retires but also won’t be spending savings prior to 55 as we live off my salary. We still have a son at university and want to be able to fund a house deposit which are also reasons why I’ll work till 55. I’ve also got a healthy pension. A deferred DB of about £20k at 60 but with only 2.5% fixed annual increases, another small one for £2k from 65, and I’m now in a current DB which will be about £13k at 62 which has uncapped inflationary increases. So about £35k in total.

I’ve also got a DC around £480k built up when my previous employer closed the DB. Realising the benefit I had when it had gone is what started me looking into pensions. My employer contributed 15% if I contributed 10% but I actually slowly increased it to 20% to contribute the sort of levels required to match the DB benefit. Timing was luck, starting this in 2011 with strong stock market growth since, and having been shielded by the DB in the 2008 crash. Although this was in the default fund for most of the time, 75% of that was still in equities. I transferred it to global trackers in 2019 and was lucky to not have much in bonds recently. Now it’s about 50/50 global equities and short term money market funds.

Loose plans are to take DC TFLS to move house somewhere nicer then use the DC to fill the gaps until the various DBs kick in and then 2x full SPs. We also have some savings in ISAs and premium bonds if there is a market downturn or we need quick funds. We will also look at the alternative of taking DBs earlier and not spending all SIPP funds, depending on early reduction factors, view on risk and inheritance considerations.

We are very fortunate with what we have built up and recognise the luck of open DBs and timing of savings v market performance, but also greatly appreciate everything learnt from this site and then took the decision to prioritise saving over increasing spending as our salaries grew