Pensions advice please.

TUVOK

I'm writing this post on behalf of my daughter in law who is just turned 50 years old, she needs advice on her pensions and what she should do with them with regards to her future financial future.
She has obtained her N.I. record of contribution years and has 32 years full contributions and 17 years left to further contribute to her retirement date of 2040.
She also has a civil Service pension of which the latest details are that she has £9102-00, the earliest she can access this is at the age of 60 years. 
In her existing job she has a company pension which is operated by Standard Life , it's current value is £15190-76, the earliest she can obtain this is at the age of 57 years

She would like help in deciding what she should do with this combination of pensions, namely what options does she have? what actions/decisions she should contemplate?
My advice to her is to do nothing until she obtains more expert advice which hopefully some forum members might be able to provide.

Our thanks for any/all replies.

Dazed_and_C0nfused

Presumably the civil service pension is the actual annual pension.  This should increase each year with annual inflation related revaluations.

That plus her State Pension of £10,600 is a decent guaranteed income base in retirement.  She will no doubt reach that amount well before the 17 years is up if she is still working.

Is the Standard Life a DC pension and if so is £15,190.76 the value of her pension fund?

TUVOK

I've looked at the Standard Life pension statement and it does not detail anything in detail apart from the amount and date availability.
I'm not sure what 'a DC pension is? sorry.
I assume that the S/Life pension is invested in some sort of fund run by them or one run by some other financial company and is subject to daily market valuation , or would I be incorrect in thinking that is the case?

Doctor_Who

TUVOK said:

I've looked at the Standard Life pension statement and it does not detail anything in detail apart from the amount and date availability.
I'm not sure what 'a DC pension is? sorry.
I assume that the S/Life pension is invested in some sort of fund run by them or one run by some other financial company and is subject to daily market valuation , or would I be incorrect in thinking that is the case?

Don't be sorry for asking a question. A DC (defined contribution) pension holds a 'pot' of money that is typically invested in one or more funds in the stock market.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/defined-contribution-pension-schemes

TUVOK

Thank you, yes, I thought that would be the case re stock market fund.
The summary gives no details of which actual fund it is, would be interesting to see its performance.

As regards 'Is it a DC pension' I'll have to inquire if she knows if she is a paying a fixed amount each month. 

Dazed_and_C0nfused

A DB pension is often referred to as final salary and there is no pot of money, you get a pension based on the scheme rules.  

A DC pension is where you build up a pot of money and use to help fund your retirement.  There is usually a lot more flexibility with a DC pension but that £15k might only generate an annual pension of £500-600.

If the civil service and State Pension will be sufficient for her to live on from State Pension age then one option is to use the DC fund as a bridging pension.

Instead of having £500-£600/year she could say retire slightly earlier than SPa and use that fund to bridge the gap to State Pension starting.

But she had plenty of time to bump up the Standard Life pot and there are lots of other options which may suit her better.

LHW99

She could try a free consultation with Pensionwise at

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

Not advice, but they could help her identify what her options would be.

If she has a full state pension and a civil service pension, she has a good index linked base.

One place to start would be to look at what those would pay her in today's money, and see how that compares with what she currently spends (minus work-based expenses like travelling, and perhaps minus mortgage if she has one)

r6mile

She is in a decent good position.

From age 60, she will have a guaranteed income £9,102 annual salary from her Civil Service (plus perhaps a lump sum, depending on whether she is on the Classic or Premium pension).

From age 67, she will also have a guaranteed inflation-linked income of £10,600 from her state pension.

Plus her Standard-Life pot which she still has some time to build up. This is not annual payment, but rather a 'pot' that is invested and she will have to decide how to manage.

Depending on when she wishes to retire, one option (more viable if any mortgage will be paid off by then) might be to retire at 60 and live on her Civil Service pension supplemented by her Standard-Life pot to tide her over until age 67. Or perhaps go part-time. And from 67 live on both her Civil Service + State Pension, for an annual guaranteed income of around £20k.

Albermarle

TUVOK said:

Thank you, yes, I thought that would be the case re stock market fund.
The summary gives no details of which actual fund it is, would be interesting to see its performance.

As regards 'Is it a DC pension' I'll have to inquire if she knows if she is a paying a fixed amount each month. 

Seems a bit odd that the investment fund is not mentioned. Are you sure?

Anyway she should be able to get on line/real time access to her pension fund via the SL website or app. She may have been given a username and password in the past, and forgot about it. She will probably have to call them .

As others have said she will have a good base of guaranteed income, but she should be under no illusion that a pot of £15K is very small in pension terms. If she wants a higher income in retirement, she should be looking at funding this pension with a significant % each year, if she can afford it. 

TUVOK

Thanks to all members who have replied.
My daughter in law has many pension issues to check now as a result of your informative replies.