Totally Lost with my pension

JayKay70

Hi all,

Just looking for some advice and will also give some of my background.

I started work straight from school and worked for two companies (locksmiths) right up until the age of 46......that is when i had a back injury followed by severe arthritis, now i can't work and am on the following benefits:

• Income Support
• Personnel Independent Payment 

Over them years of working i had a total of 3 private pensions, two with Aviva and one with Utmost.

When i took out them pensions with the companies i did not have a clue what i was doing and still to this day now i don't have the foggiest of what I'm doing.

All the years they have been sending me letters talking about my pensions and i don't understand any of the letters so i just file them away.

That changed about 6mths ago when i decided to look into it a bit more, after some research it came back that it's better for me to have all three pensions in one pot, and look for a company that offers better results.

So i decided to transfer all my pensions from Aviva and Utmost too Scottish Widows (Part of Halifax i think), into a Retirement Account.

Whether that was the right thing to do i don't know

All i know is this it what the policy says:

• Policy start date:30 August, 2023
• Policy status:INFORCE
• Next regular payment date:There are no regular payments currently being made
• Policy anniversary date: 30 August, 2024
• Chosen retirement date: 24 December, 2037
• Retirement age:67
• Governed investment strategy:Cautious - targeting annuity
• Drip Feed Drawdown (DFD) Active:No

Ain't got a clue on what most of the above means.

My questions are:

Have a made the right choice on my policy or is there a better choice?

Can the retirement age be decreased?.....i thought with Private Pensions it was 55?

If yes and i get the money out will it effect my benefits i get because i believe any saving over £16k benefits stop?

Reason I'm asking as i intend to give my pension money to my kids as i don't live beyond my means, i don't own a car or have any expensive phones, and i budget very hard and am quite happy with what little money i have.

I just feel they will benefit more from it than me, life is so much harder for these young kids.

Sorry for the long post, I'm just trying to give as much info as i could, any answers would be most welcome.

All the best

Jay

Marcon

JayKay70 said:

Hi all,

Just looking for some advice and will also give some of my background.

I started work straight from school and worked for two companies (locksmiths) right up until the age of 46......that is when i had a back injury followed by severe arthritis, now i can't work and am on the following benefits:

• Income Support
• Personnel Independent Payment 

Over them years of working i had a total of 3 private pensions, two with Aviva and one with Utmost.

When i took out them pensions with the companies i did not have a clue what i was doing and still to this day now i don't have the foggiest of what I'm doing.

All the years they have been sending me letters talking about my pensions and i don't understand any of the letters so i just file them away.

That changed about 6mths ago when i decided to look into it a bit more, after some research it came back that it's better for me to have all three pensions in one pot, and look for a company that offers better results.

So i decided to transfer all my pensions from Aviva and Utmost too Scottish Widows (Part of Halifax i think), into a Retirement Account.

Whether that was the right thing to do i don't know

All i know is this it what the policy says:

• Policy start date:30 August, 2023 - that's the date you put all your pensions into the policy with Scottish Widows
• Policy status:INFORCE - basically means you've not taken your benefits
• Next regular payment date:There are no regular payments currently being made - you aren't making any further contributions to the policy
• Policy anniversary date: 30 August, 2024 - the policy's birthday! You took it out on 30 August, so each subsequent 30 August is an 'anniversary' date. Certain things may or may not happen on such dates, depending on the terms of the policy
• Chosen retirement date: 24 December, 2037 - all such policies need a 'notional' retirement date, which is either supplied by the policyholder (you) or the insurer will use a default option, usually state pension age for the policyholder
• Retirement age:67 - the age you'll be on 24 December 2037
• Governed investment strategy:Cautious - targeting annuity - 'cautious' refers to the level of risk in the underlying investments held in the pension. Higher risk means greater volatility; cautious should be a bit calmer along the way, but the result probably won't shoot the lights out. The investment strategy is suitable for someone who intends to buy an annuity (posh word for pension), rather than taking the lot as a cash lump sum
• Drip Feed Drawdown (DFD) Active:No - you aren't accessing in dribs and drabs

Ain't got a clue on what most of the above means.

My questions are:

Have a made the right choice on my policy or is there a better choice? Impossible to know from such limited information

Can the retirement age be decreased?.....i thought with Private Pensions it was 55? - can be accessed at age 55 for those reaching 55 before the rules change and the minimum age rises to 57 in 2028. Funds can be accessed before 55/57 if you meet a scheme's criteria for ill health early retirement - check with the rules of the scheme; medical evidence would be needed to support such an application where it is earlier than 55/57

If yes and i get the money out will it effect my benefits i get because i believe any saving over £16k benefits stop? You certainly need to check carefully before doing anything. See https://www.moneysavingexpert.com/family/benefits-check/ and https://forums.moneysavingexpert.com/categories/benefits-tax-credits

Reason I'm asking as i intend to give my pension money to my kids as i don't live beyond my means, i don't own a car or have any expensive phones, and i budget very hard and am quite happy with what little money i have.

I just feel they will benefit more from it than me, life is so much harder for these young kids.

Sorry for the long post, I'm just trying to give as much info as i could, any answers would be most welcome.

All the best

Jay

Please see above.

MallyGirl

If yes and i get the money out will it effect my benefits i get because i believe any saving over £16k benefits stop?

While the money is sitting in a pension and you are under pension age (67) it is not included in any calculation of means tested benefits. At 67 you probably come to benefits like pension credit and this pot does come into play there.
If you have health/mobility issues it may be that in the future you need care. If you have given away your money and so cannot pay for your own care then 'deprivation of assets/capital' could come into play so you need to be very careful with this plan.
When you take income from the pension pot it will be considered for benefit calculations - even if you give it to your kids. You need to understand the rules around your benefits in terms of how income/savings affect what you get. The benefits board will be more clued in on that I would expect. 
https://forums.moneysavingexpert.com/categories/benefits-tax-credits

Albermarle

That changed about 6mths ago when i decided to look into it a bit more, after some research it came back that it's better for me to have all three pensions in one pot, and look for a company that offers better results.

The results you get from a pension, depends on how much you add to it ( obviously) and how well the investments inside the pension perform. 

For example if your money was in the same investment fund in Aviva or Scottish Widows, it would perform just the same.

Here you can see the investment fund you have within the Scottish Widows pension.

• Governed investment strategy:Cautious - targeting annuity

Did you choose this ? As being too cautious can be a bad strategy, although it depends on how and when you want to withdraw the money ( which I guess you do not know yet) 

JayKay70

@Marcon

Many thanks for your detailed answers, quick question, i am 53 right now so does that mean when i reach 55 i can take all the money out? or can i leave it where it is?

@Ma@MallyGirl

Many thanks for your answer, i will ask on the benefits-tax-credits part of the forum about the specifics regarding my pension and how it will effect my benefits.

@Albe@Albermarle

Thanks for your answer, Yes i did choose Cautious - targeting annuity, can't remember why but i think it was due to be less risky, would i be better of changing that as I'm only 53 and don't intend to take the money out, i intend to leave it where it is as long as possible, or would i be better of transferring the pension to something better where it would earn money?

Marcon

JayKay70 said:

@Marcon

Many thanks for your detailed answers, quick question, i am 53 right now so does that mean when i reach 55 i can take all the money out? or can i leave it where it is?

When you reach 55 you can take all the money out (assuming your policy allows that, which is highly likely - if in doubt check with the provider) or leave it where it is. 

Albermarle

JayKay70 said:

@Marcon

Many thanks for your detailed answers, quick question, i am 53 right now so does that mean when i reach 55 i can take all the money out? or can i leave it where it is?

@Ma@MallyGirl

Many thanks for your answer, i will ask on the benefits-tax-credits part of the forum about the specifics regarding my pension and how it will effect my benefits.

@Albe@Albermarle

Thanks for your answer, Yes i did choose Cautious - targeting annuity, can't remember why but i think it was due to be less risky, would i be better of changing that as I'm only 53 and don't intend to take the money out, i intend to leave it where it is as long as possible, or would i be better of transferring the pension to something better where it would earn money?

There is no need to transfer the pension. There will be plenty of choice of different investment funds with SW if you look at their website.

• Governed investment strategy:Cautious - targeting annuity

If you are thinking it will be a few years before you might need to withdraw it, you will probably be better off in a less cautious fund. Is there maybe a Governed investment strategy that is not cautious/targeting annuity?

JayKay70

@Albermarle

Note: I am now thinking of contributing money to my pension right up until 2037, just don't know what kinda contribution £ wise would make a difference over that time.

They have the following choices:

Cautious

You can expect your pension pot to have some ups and downs in value. While there’s potential for some growth, there’s also the potential for some losses.

You’re cautious with your investments and don’t feel comfortable taking much risk with your money.

At 15+ years from retirement - PP3
At 10 years from retirement - PP4
At 5 years from retirement - PP4

Balanced

You can expect your pension pot to go up and down in value, but these may be sharper and more frequent than in the 'cautious' approach. While there is the potential for higher growth, potential losses are also slightly higher.

You’re a balanced investor and feel comfortable taking some risk with your money for, potentially, more reward.

At 15+ years from retirement - PP2
At 10 years from retirement - PP3
At 5 years from retirement - PP4

Adventurous

You can expect your pension pot to have a lot of sharp ups and downs in value. While there’s potential for high growth, there’s also the potential for significant losses.

You’re an adventurous investor and feel comfortable taking high risk with your money for, potentially, high rewards.

At 15+ years from retirement - PP1
At 10 years from retirement - PP2
At 5 years from retirement - PP3

Maybe Balanced would be better for me if i choose to keep the money in there until 2037.

FIREDreamer

JayKay70 said:

@Albermarle

Note: I am now thinking of contributing money to my pension right up until 2037, just don't know what kinda contribution £ wise would make a difference over that time.

They have the following choices:

Cautious

You can expect your pension pot to have some ups and downs in value. While there’s potential for some growth, there’s also the potential for some losses.

You’re cautious with your investments and don’t feel comfortable taking much risk with your money.

At 15+ years from retirement - PP3
At 10 years from retirement - PP4
At 5 years from retirement - PP4

Balanced

You can expect your pension pot to go up and down in value, but these may be sharper and more frequent than in the 'cautious' approach. While there is the potential for higher growth, potential losses are also slightly higher.

You’re a balanced investor and feel comfortable taking some risk with your money for, potentially, more reward.

At 15+ years from retirement - PP2
At 10 years from retirement - PP3
At 5 years from retirement - PP4

Adventurous

You can expect your pension pot to have a lot of sharp ups and downs in value. While there’s potential for high growth, there’s also the potential for significant losses.

You’re an adventurous investor and feel comfortable taking high risk with your money for, potentially, high rewards.

At 15+ years from retirement - PP1
At 10 years from retirement - PP2
At 5 years from retirement - PP3

Maybe Balanced would be better for me if i choose to keep the money in there until 2037.

A non-earner can pay a maximum of £240 per month / £2,880 per annum net into a pension which with tax relief amounts to £300 per month or £3,600 per annum.

(You can pay more but won’t get any tax relief and most providers won’t accept such contributions anyway)

This might give a fund of £40,000 to £60,000 by 2037 in todays money depending on how it is invested.

Albermarle

JayKay70 said:

@Albermarle

Note: I am now thinking of contributing money to my pension right up until 2037, just don't know what kinda contribution £ wise would make a difference over that time.

They have the following choices:

Cautious

You can expect your pension pot to have some ups and downs in value. While there’s potential for some growth, there’s also the potential for some losses.

You’re cautious with your investments and don’t feel comfortable taking much risk with your money.

At 15+ years from retirement - PP3
At 10 years from retirement - PP4
At 5 years from retirement - PP4

Balanced

You can expect your pension pot to go up and down in value, but these may be sharper and more frequent than in the 'cautious' approach. While there is the potential for higher growth, potential losses are also slightly higher.

You’re a balanced investor and feel comfortable taking some risk with your money for, potentially, more reward.

At 15+ years from retirement - PP2
At 10 years from retirement - PP3
At 5 years from retirement - PP4

Adventurous

You can expect your pension pot to have a lot of sharp ups and downs in value. While there’s potential for high growth, there’s also the potential for significant losses.

You’re an adventurous investor and feel comfortable taking high risk with your money for, potentially, high rewards.

At 15+ years from retirement - PP1
At 10 years from retirement - PP2
At 5 years from retirement - PP3

Maybe Balanced would be better for me if i choose to keep the money in there until 2037.

Probably yes .

JayKay70

Many thanks all for your advice, it has gave me a better perspective of what to do.