What to do?

CarpyDaz

I have recently become mortgage free so I have a bit more money to play with.  I currently put away £400 a month in 2 accounts and have £4k sat in a Santander high interest account.  I reckon I can afford to save another £200 to £300 a month.  I've also been tracing all the pension funds I've acquired from various employers over the years, 1 has £25k in and 2 others have £300ish in. I draw an Armed Forces pension which covers most of my outgoings each month.

My question is; when the savings accounts rates expire do I chuck everything in some form of ISA, and withdraw all my pension pots and include them or would I be better off putting the various pension pots into 1 pension fund and include the savings? 

I want to keep an easy to get at emergency fund of about £10k, but I'm also looking at my retirement for the first time (I'm 59). When I finally retire I will be relying on my army pension and mine and my wife's state pensions, she also receives a pension at the moment after having retired early due to ill health.

Any advice would be greatly appreciated.

eskbanker

CarpyDaz said:

My question is; when the savings accounts rates expire do I chuck everything in some form of ISA, and withdraw all my pension pots and include them or would I be better off putting the various pension pots into 1 pension fund and include the savings?

Not sure that either of those options are optimal - there's little obvious point in withdrawing anything from pensions other than to spend, and consolidation in itself is unlikely to add much value, unless you're in some poor-value products?

Using the ISA shelter (capped at £20K/year) may be sensible for the cash savings though and/or you can potentially make further contributions to one or more pensions, if you have enough headroom with your earned income....

MX5huggy

If you can save money then putting the money INTO a pension (one of your existing or a new one) is probably the best thing to do. 

LHW99

You have both checked your state pension forecast (- read it all)?

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

It seems likely you would have been "contracted out", so could still be short of the full amount. People here have reported needing as few as 25 years, and as many as 50 (I think) to get to maximum. If you are below max, it may be possible to buy extra years NI to boost it. That's generally good value.

If you withdraw all your pension pots, you may end up going into a higher tax bracket. Better to spread withdrawals over a number of years.

Don't forget, your pots could be used to buy an annuity - guaranteed income, and some options will provide pension for your wife if you unfortunately passed first. Your army pension will have some widow's protection, but new state pension itself can't be inherited (only some of the state second or additional pension payments)

CarpyDaz

I can't add to the £25k pension pot as it's closed. 

Both my wife and I qualify for the full state pension. She also receives the maximum PIP (although not guaranteed forever).

I think my wife would like a bit more available cash now as we will have more of an income when we start receiving the state pension. (I only work 18 hours per week)

eskbanker

CarpyDaz said:

I can't add to the £25k pension pot as it's closed.

There's nothing stopping you from starting another pension, such as a SIPP, if none of your existing ones are open for further contributions - it'll usually be more tax-advantageous than using an ISA at your age.

LHW99

eskbanker said:

CarpyDaz said:

I can't add to the £25k pension pot as it's closed.

There's nothing stopping you from starting another pension, such as a SIPP, if none of your existing ones are open for further contributions - it'll usually be more tax-advantageous than using an ISA at your age.

And if your did, you may be able to transfer other DC pensions into it, to make one pot in one place - easier to manage in some ways.