Spare Cash Pension or Savings ?

Heytheremrblue

I find myself with about £300 spare a month would this be best put into some kind of savings or into Pension ( DB ) ? Current around £110k in pot.

I'm 56 with an ideal plan of retiring around 60.

ISA's Maxed
PB's Maxed
No dept
No mortgage

Cheers

Linton

You would need to look at the numbers and the scheme options but the DB pension could well be the best choice.  Though it depends on your circumstances such as whether you have enough cash to cover  major one-off expenses and gaps between you retiring, getting your DB pension and getting State Pension.

Is the "£110K  in pot" something to do with the DB pension or is it in cash savings?  Are the ISAs cash or S&S?

Heytheremrblue

Thanks Linton 

£110k in Pension pot

ISA's - Cash

No problem covering any emergancies etc

Jjay

If you have no mortgage, why are you waiting until 60? At least do flexi retirement to top up the cash and enjoy your free time while working out the little grey cells three days a week.

Heytheremrblue

Jjay said:

If you have no mortgage, why are you waiting until 60? At least do flexi retirement to top up the cash and enjoy your free time while working out the little grey cells three days a week.

Mrs says I cant yet 

Albermarle

Heytheremrblue said:

Thanks Linton 

£110k in Pension pot

ISA's - Cash

No problem covering any emergancies etc

A Defined Benefit pension does not have a pot. It can have a transfer value, but that is not the same.
Are you sure it is not a Defined Contribution (DC) pot?

Pension basics | Help with pension basics | MoneyHelper

xylophone

Mrs says I cant yet




£110k in Pension pot

My wife won't let me!

You said that you have a DB pension - a DB pension does not have a "pot".

It does have a cash equivalent transfer value.

You have a promise to pay a certain level of benefits to you/spouse/dependants at earliest scheme retirement age/death etc.

Are you saying that your Scheme offers AVCs?

Is 60 the earliest age at which you can draw the pension without actuarial reduction?

Have you and your spouse obtained state pension forecasts?

https://www.gov.uk/check-state-pension

Heytheremrblue

Albermarle said:

Heytheremrblue said:

Thanks Linton 

£110k in Pension pot

ISA's - Cash

No problem covering any emergancies etc

A Defined Benefit pension does not have a pot. It can have a transfer value, but that is not the same.
Are you sure it is not a Defined Contribution (DC) pot?

Pension basics | Help with pension basics | MoneyHelper

Yes that the one thanks for that. I do know that my employer is paying their max contribution.

Heytheremrblue

xylophone said:

Mrs says I cant yet




£110k in Pension pot

My wife won't let me!

You said that you have a DB pension - a DB pension does not have a "pot".

It does have a cash equivalent transfer value.

You have a promise to pay a certain level of benefits to you/spouse/dependants at earliest scheme retirement age/death etc.

Are you saying that your Scheme offers AVCs?

Is 60 the earliest age at which you can draw the pension without actuarial reduction?

Have you and your spouse obtained state pension forecasts?

https://www.gov.uk/check-state-pension

Yes has AVC's
Actuarial reduction ?
State Pension both fully paid up

Thanks

Linton

Heytheremrblue said:

xylophone said:

Mrs says I cant yet




£110k in Pension pot

My wife won't let me!

You said that you have a DB pension - a DB pension does not have a "pot".

It does have a cash equivalent transfer value.

You have a promise to pay a certain level of benefits to you/spouse/dependants at earliest scheme retirement age/death etc.

Are you saying that your Scheme offers AVCs?

Is 60 the earliest age at which you can draw the pension without actuarial reduction?

Have you and your spouse obtained state pension forecasts?

https://www.gov.uk/check-state-pension

Yes has AVC's
Actuarial reduction ?
State Pension both fully paid up

Thanks

Some DB schemes have the very valuable option of being able to pay for the DB tax free lump sum from the AVC part of the  pension  So you get a full lump sum + a full DB pension.  Does your's?

Actuarial reduction is how much less DB pension you get if you take it early. It is normal for one to be applied.  Or conversely you may get a higher DB pension if you delay taking it which is less common..

dunstonh

Can you clarify, as currently you have said there is a DB pension but its actually a DC pension and now you are saying its an AVC (which would be in addition to a DB pension).

Does it invest in investment funds where the value changes daily or is it based on years of service?

The pension tax wrapper (DC) beats cash savings and ISAs when being used for retirement planning and assuming you are not going to breach the tax free cash lump sum limits.