Looking to Protect My 25% Tax-Free Lump Sum

Johnnyboy11

ClashCityRocker1 said:

(Obviously no need to adjust any government generous DB gold-plated pensions, these can be left alone getting increases via the tax payers)

Since I've been in it the following detrimental changes have been applied to my public services pension:

Increased contribution rate by 3%
ended contracting out (another 1% plus)
Converted from final salary to career average
Normal pension age increased from 60 to state pension age
Adjustments in payment reduced from RPI to CPI

So they have hardly been left alone. Still a good pension, yes, but please don't make these glib Daily Mail jibes about untouchable gold plated pensions.

And the ending of LGPS Rule of 85 in 2008.

HedgehogRulez

as a mid 40 year old I do feel a bit nervous about various ladders being potentially pulled up. I am planning to take my 25% lump sum from my DC pension to pay off a significant mortgage which we're wanting to acquire next year.

My pension pot is sat at £850k now and so likely to significantly exceed £1m in 12 years time when I can take it. It’s already been eroded by recent changes to max TFLS. It would be extremely annoying if the £268k limit was eroded further, but there's nowt I can do about it.

MetaPhysical

If you had to take a TFLC by either:
1. Accept a lower DB pension (15k p.a.  as opposed to 25k p.a. in exchange for a 124k PCLS
2. Keep the 25k in option 1 and instead take a 124k sum from a 650k pension DC pension pot.

I am leaning towards option 2 because option 1 is guaranteed and index linked.  

The TFC would be used to supplement income by enablign me to keep below the 40% tax band by 10k per year over ten years until SPA and be invested in SnS ISA.

What do you think?

Silvertabby

Johnnyboy11 said:

ClashCityRocker1 said:

(Obviously no need to adjust any government generous DB gold-plated pensions, these can be left alone getting increases via the tax payers)

Since I've been in it the following detrimental changes have been applied to my public services pension:

Increased contribution rate by 3%
ended contracting out (another 1% plus)
Converted from final salary to career average
Normal pension age increased from 60 to state pension age
Adjustments in payment reduced from RPI to CPI

So they have hardly been left alone. Still a good pension, yes, but please don't make these glib Daily Mail jibes about untouchable gold plated pensions.

And the ending of LGPS Rule of 85 in 2008.

Ended for new joiners on or after 1 Oct 2006.

Albermarle

Cobbler_tone said:

Worth noting (according to online reports) that under 1% reach a pension pot of £1m. Under 5% under £500k and the average pot £88k. If it ever does get lowered it’ll be another tax band freeze, i.e. leading to (further) fiscal drag.

As you will know you have to be careful with statistics.
For example does the 1% include people with a good DB pension, such as hospital consultant or senior civil servant, which could easily have a nominal worth of a Million and a potential tax free lump sum around he LSA limit?
Regarding the average pot, when I have looked before, numerous different figures pop up depending on the parameters.

MetaPhysical

Albermarle said:

Cobbler_tone said:

Worth noting (according to online reports) that under 1% reach a pension pot of £1m. Under 5% under £500k and the average pot £88k. If it ever does get lowered it’ll be another tax band freeze, i.e. leading to (further) fiscal drag.

As you will know you have to be careful with statistics.
For example does the 1% include people with a good DB pension, such as hospital consultant or senior civil servant, which could easily have a nominal worth of a Million and a potential tax free lump sum around he LSA limit?
Regarding the average pot, when I have looked before, numerous different figures pop up depending on the parameters.

Absolutely.  However, you may be assured that the government will use whichever statistics, however skewed and disingenuous, suit their narrative,

Albermarle

MetaPhysical said:

Albermarle said:

Cobbler_tone said:

Worth noting (according to online reports) that under 1% reach a pension pot of £1m. Under 5% under £500k and the average pot £88k. If it ever does get lowered it’ll be another tax band freeze, i.e. leading to (further) fiscal drag.

As you will know you have to be careful with statistics.
For example does the 1% include people with a good DB pension, such as hospital consultant or senior civil servant, which could easily have a nominal worth of a Million and a potential tax free lump sum around he LSA limit?
Regarding the average pot, when I have looked before, numerous different figures pop up depending on the parameters.

Absolutely.  However, you may be assured that the government  every political party will use whichever statistics, however skewed and disingenuous, suit their narrative,

Slight amendment.

BikingBud

Albermarle said:

MetaPhysical said:

Albermarle said:

Cobbler_tone said:

Worth noting (according to online reports) that under 1% reach a pension pot of £1m. Under 5% under £500k and the average pot £88k. If it ever does get lowered it’ll be another tax band freeze, i.e. leading to (further) fiscal drag.

As you will know you have to be careful with statistics.
For example does the 1% include people with a good DB pension, such as hospital consultant or senior civil servant, which could easily have a nominal worth of a Million and a potential tax free lump sum around he LSA limit?
Regarding the average pot, when I have looked before, numerous different figures pop up depending on the parameters.

Absolutely.  However, you may be assured that the government  every political party will use whichever statistics, however skewed and disingenuous, suit their narrative,

Slight amendment.

Isn't the government correct though?

They are empowered to use skewed figures and move the goalpost or even leave them where they are to achieve maximum fiscal drag.

Whilst other parties can only bleat about what they would do.