Re: Pension advice : Thu Sep 06, 2012 2:23 am  

If you ring up for advice from whoever runs your pension fund, very likely you will get some, free. I did.

If you want to read up on it, go on the Hargreaves Lansdown site which has loads of info, and if you get a quote for your annuity, they will shop around and probably enable you to beat it by at least 25%.

If it is a contrib. pension then if you have reached the age when you can take it, you need to be sure that if you switch pension provider, you don't take a big hit. That can happen if you simply "move" the pension to a different provider, but not if you elect to take the pension/lump sum, and do so by transferring the pot to another provider on "maturity".

On no account do anything without getting adequate advice as you could do yer bollox in.

Re: Pension advice : Thu Sep 06, 2012 8:14 am  

Pensions are simple: just become a boss If you need any tips on achieving success, just PM Sal Paradise, he knows all about getting on in "the real world"

Pensions are simple: just become a boss If you need any tips on achieving success, just PM Sal Paradise, he knows all about getting on in "the real world"

[JTB]

Re: Pension advice : Thu Sep 06, 2012 9:23 pm  

First off any benefits you are able to draw as a lump sum or as a monthly pension are dependent on your age. If you're not 55 or likely to be soon there are very limited circumstances in which benefits will be paid.

Assuming that the pension you have is a money purchase type arrangement (ie. a pot of money that has accumulated over time with contributions and investment growth) you will likely have 2 figures available - a current fund value and a transfer value. Sometimes the same, sometimes quite a bit different dependent on terminal bonuses or scheme admin charges. If you want to look at moving it, obviously its more beneficial if the tv is larger than the fv and you will have a number of options, including moving it to a private arrangement where you can have more control over when it will be paid out (for eg many occupational schemes will only let you take benefits before the scheme retirement age at the trustees discretion). You will still be subject to the minimum retirement age of 55 but will have options such as taking the 25% cash lump sum without putting the rest of the pension into payment if you don't need the income.

Sadfish wrote:

If it was contributory, then that part of your pension, the money you have paid in, is yours and should be cashable in at anytime, of course, by doing that, you will also lose the other part the company paid in or be able to take a small percentage lump sum before it comes to fruition.

This is not the case sadly. If you are a bit of a job hopper, you sometimes are offered the opportunity to receive a refund of contributions upon leaving the scheme if you have been in it less than 2 yrs. Any period longer than this and your contributions are locked in. There is a lot of tax relief on money paid into pensions and as such there are also a lot of restrictions on how and when you can take it back out. Work on the assumption that anything you have paid in is staying in until you vest the benefits and you won't be far wrong.

And I'll throw in the disclaimer that no advice has been provided in this post, just general information Happy to answer any questions by pm though.

Re: Pension advice : Thu Sep 06, 2012 9:34 pm  

JTB wrote:

First off any benefits you are able to draw as a lump sum or as a monthly pension are dependent on your age. If you're not 55 or likely to be soon there are very limited circumstances in which benefits will be paid.

Assuming that the pension you have is a money purchase type arrangement (ie. a pot of money that has accumulated over time with contributions and investment growth) you will likely have 2 figures available - a current fund value and a transfer value. Sometimes the same, sometimes quite a bit different dependent on terminal bonuses or scheme admin charges. If you want to look at moving it, obviously its more beneficial if the tv is larger than the fv and you will have a number of options, including moving it to a private arrangement where you can have more control over when it will be paid out (for eg many occupational schemes will only let you take benefits before the scheme retirement age at the trustees discretion). You will still be subject to the minimum retirement age of 55 but will have options such as taking the 25% cash lump sum without putting the rest of the pension into payment if you don't need the income.

This is not the case sadly. If you are a bit of a job hopper, you sometimes are offered the opportunity to receive a refund of contributions upon leaving the scheme if you have been in it less than 2 yrs. Any period longer than this and your contributions are locked in. There is a lot of tax relief on money paid into pensions and as such there are also a lot of restrictions on how and when you can take it back out. Work on the assumption that anything you have paid in is staying in until you vest the benefits and you won't be far wrong.

And I'll throw in the disclaimer that no advice has been provided in this post, just general information Happy to answer any questions by pm though.

Yes. As I said above - the money is not yours but trustees' money, irrespective of whether you contributed it or not. If its a personal arrangement you lose your capital at the point an annuity is bought. You get your 5 or 6% pa (or whatever at the time) and an insurance company takes your pot! That's the price of tax relief.

[Sadfish]

Re: Pension advice : Fri Sep 07, 2012 7:50 am  

JTB wrote:

This is not the case sadly. If you are a bit of a job hopper, you sometimes are offered the opportunity to receive a refund of contributions upon leaving the scheme if you have been in it less than 2 yrs. Any period longer than this and your contributions are locked in. There is a lot of tax relief on money paid into pensions and as such there are also a lot of restrictions on how and when you can take it back out. Work on the assumption that anything you have paid in is staying in until you vest the benefits and you won't be far wrong.

Both the contrib company pensions have a cash value which pretty much equates to my contributions which is why I posted this.

of course this only availavle post 55.