Final Salary Pension And Private Pension

PhilJones2025

Hi Guys any advice appreciated im 59 my final salary pension due this year about £8k a year i left that job 10 years ago and started a private pension with my current employer i have £30k in the pot i intend to keep working until at least 67 health willing ... should i be doing anything with this final salary pension when it becomes due ? should i bank it, take tax free cash, top up my current pension i have no idea.
My current salary covers my needs so don't need the pension at the moment.

Any advice appreciated

Cobbler_tone

Hi Phil. Assuming there is no real benefit of deferring it you have some good options.
If you are paying into your DC via salary sacrifice you could up your contribution to get the tax benefit. With a small pot you could turbo charge it! 
You can clearly start saving more in regular savers, onto ISAs etc.
You could have some really nice holidays! 

If you don't need the tax free cash and still at a young age, you could take the full pension to generate a higher guaranteed future income. It sounds as though you don't want to stop working until you are at state pension age but it would certainly enable you to finish earlier if you wished.

Good luck!

DE_612183

What is your current salary?

If you take the DB pension this is taxable ( although you could plough that back into a private pension and get tax relief that way ).

Marcon

PhilJones2025 said:

Hi Guys any advice appreciated im 59 my final salary pension due this year about £8k a year i left that job 10 years ago and started a private pension with my current employer i have £30k in the pot i intend to keep working until at least 67 health willing ... should i be doing anything with this final salary pension when it becomes due ? should i bank it, take tax free cash, top up my current pension i have no idea.
My current salary covers my needs so don't need the pension at the moment.

Any advice appreciated

Finding out your options in respect of your final salary pension would be a good starting point.  If 60 is your final salary scheme's normal retirement date, then starting to take your pension after that date is known as 'late retirement'. 

You say it is 'due' this year, but have checked if you can defer putting it into payment to a later date - and if you do, what increases will there be to the pension? If the answer is that the scheme doesn't offer late retirement, there's no benefit in delaying beyond age 60, but it's worth finding out the facts, especially as you don't need the money now.

Moonwolf

With a pension of £8k a year.  Do you qualify for full state pension, you probably will but check, you should have around £20k a year guaranteed pension in today's money when you retire.  Is that enough to live on?

If yes, then I suggest ISAs and holidays. 

If you want a bit more then

Check that delaying taking the DB it doesn't improve it.
or
Look at paying extra pension via your employment, do they match payments or salary sacrifice.  This is probably the best way and obviously with this DB pension you can reduce your take home by £500 a month and you should still have the same to live on.  That could take your pension pot to over £100K giving you an extra £3k a year or so.

squirrelpie

Final salary pensions can differ a lot in what is possible. It's very much down to what the rules of the individual scheme say as to how much tax free cash you can/should take and whether it's good to delay (defer) starting the pension or not. So it would be very helpful if you can say what pension scheme it is. Is it a public scheme (e.g. NHS or LGPS etc) or a private scheme run by an employer or what exactly?

Secret2ndAccount

 What is your commutation rate? If you give up £1000/yr in exchange for a £12k lump sum, your commutation rate is 12:1, which is terrible. If you give up £1000/yr in exchange for a £30k lump sum, your commutation rate is much better, and you might well want to take the lump sum. What is your commutation rate?

optoutDB

What's your current salary, and how much do you want per year to live on after 67 ?

Without that info £8k pa and £30k has no context.