Stepped Pension

ray4221

xylophone said:

The scheme guide just says a stepped pension will increase your AA usage..."...and you should consider this prior to choosing this option...

Have you tried googling BAE Systems Triggering the Annual Allowance?

Hi, yes ..."...Please note this also applies if you are a deferred member, as even though you are not otherwise contributing to the scheme, the increase in your pension by taking the Stepped pension option is tested against your AA when you retire.

The DB scheme administrator can provide a quotation of the estimated Pension Input Amount that would arise..."

So yes it is 'tested against your AA' have asked Aptia for a 'quotation of the estimated Pension Input Amount' should get an answer from them in about 5 weeks.....

Their answer may or may not help with this.

ray4221

xylophone said:

Have you obtained a state pension forecast? What exactly does it show?

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

Yes full state pension, fortunately.

xylophone

Do keep us updated with progress.

squirrelpie

Could you also request a tax-free sum (25%), either as an alternative or in addition to asking for a stepped pension? How does that affect your overall pension payments over your assumed lifetime? [ The BAE Systems website seems poorly organized, referring to a "Stepped Pension Guide" but seemingly providing no way to access it! ]

xylophone

I am wondering whether taking the stepped option means that a PCLS is not available.

squirrelpie

No it doesn't according to the website, anyway. It's specifically mentioned as an option to choose both.

QrizB

ray4221 said:

The DB scheme administrator can provide a quotation of the estimated Pension Input Amount that would arise..."

So yes it is 'tested against your AA' 

I might be hopelessly niave, but if it's a PIA and tested against the AA it's going to be like an employer contribution? And the £3600 limit on tax relief isn't relevant? And unused AA for the past three years should be available, of which the OP has plenty?

Secret2ndAccount

 QrizB said:

...but if it's a PIA and tested against the AA it's going to be like an employer contribution? And the £3600 limit on tax relief isn't relevant? And unused AA for the past three years should be available, of which the OP has plenty?

Correct

Marcon said:
You're missing the fact that OP has no earned income in the current tax year, so can't use carry forward:

Incorrect

ray4221

squirrelpie said:

Could you also request a tax-free sum (25%), either as an alternative or in addition to asking for a stepped pension? How does that affect your overall pension payments over your assumed lifetime? [ The BAE Systems website seems poorly organized, referring to a "Stepped Pension Guide" but seemingly providing no way to access it! ]

Yes , the tax-free sum is the same for the standard pension and the stepped pension but thats a very good point if the 'pension pot' has seemly increased by 112k then why has the 25% tax-free cash not also increased for the stepped pension, I will try and ask Aptia.