Pension Advice

kingrollo
kingrollo Posts: 3,198
edited January 2019 in The cake stop
I am 55 now and can take my works pension in full at 60 - Having paid in since I was 17 - my pot doesn't look to bad.....

However my wife hasn't worked for a lot of that time so she gets next to sweet FA at 60

I would really like to go and see a pension advisor - But I am unsure what to expect, how much it will cost, and who to go to
I would also like them to come up with a plan - rather than just telling me how it is ?

Any thoughts ?

Comments

  • joe2008
    joe2008 Posts: 1,531
    Wife swap :wink:
  • what are you looking to do?
    Is your scheme DC or DB
    Has your wife paid up her NI contributions?
  • orraloon
    orraloon Posts: 12,540
    What advice do you need? IFAs will charge a fee, expect £1 - 1.5k and up. But what don't you know already?

    Final salary? If so no brainer, leave it, do not transfer out. Money purchase funds? Lots of advice exists. Example, explore the Hargreaves Lansdown site for guides. Check money advice service, or whatever now called.
  • Ben6899
    Ben6899 Posts: 9,686
    And an Adviser won't tell you what to do, merely offer advice.
    Ben

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  • orraloon
    orraloon Posts: 12,540
    Actually meant Pensions Advisory Service, not MAS. And for crissakes don't go down the scammer website route, t'internetz is rife with baxxards.
  • keef66
    keef66 Posts: 13,123
    Check your wife's State Pension entitlement / national insurance contributions record on the Govt website. If she doesn't have the requisite number of qualifying years you can make additional payments to top it up now. Will bump up her pension and when we did it we calculated it would pay for itself after 5 years or so.

    Presumably you've been getting pension statements telling you roughly how much pension your pot would give you? In addition ask your work pension admin for a cash equivalent transfer value, then find an independent financial advisor to discuss what your options are. Agree on his/her fee beforehand. Could be up to £2k I'm told. Best if you can find one based on personal recommendation.

    Quite a few of my colleagues have retired recently. Nobody bought an annuity. Everyone took the 25% tax-free cash option. Many just stuck with the company's (generous) Final Salary scheme. Others have transferred the lot into flexible self-invested schemes which have the advantage that you can access the dosh if needed, and if you both snuff it prematurely the remaining funds can be left to the kids / cats' home rather than lining the pockets of the pension scheme / provider.

    My pension affairs are quite a mess because of job changes. I have money in various places:
    3 years final salary deferred
    10 years defined contribution
    10 years final salary with current employer - deferred
    10 years and counting defined contribution with current employer

    I must follow some of my own advice and get an IFA to have a look at it all...
  • keef66
    keef66 Posts: 13,123
    Sticking with a final salary scheme isn't always a no-brainer.
  • keef66 wrote:
    Sticking with a final salary scheme isn't always a no-brainer.

    +1
  • cougie
    cougie Posts: 22,512
    What kind of a plan ? Is your wife working now ? Does she have options with her pension scheme ?

    Does your firm not offer any pension advice ?

    Definitely worth checking up on your wife's NI contributions as they can be made up.

    Do you have an idea of how much you need in your retirement ?
  • orraloon
    orraloon Posts: 12,540
    Ok, maybe a simplistic thing to say no brainer to stay in final salary. However... rules n regs are making it much more onerous for an IFA to recommend a transfer out, even if enforcement of said is a bit lacking, witness the scammer fest which happened recently with the British Steel pension scheme in Newport.

    Guess if one has limited life expectancy then yes, look to get cash into the estate perhaps. But, this being a cycling forum...

    The rate of return on back payments of missing NI years is very good. Take that option if you can.

    If one has a mix of final salary and DC schemes, then I'd def be saying (as if I know squat) keep the final salary elements, and self manage in a SIPP the DC funds. Is what I do. Balance of risks and that.

    There is a lot of free guidance out there available, work out what you don't know and pay the IFA to fill in the gaps if you need to.

    Oh, and have a browse on the LemonFool forums for general investment advice; is the successor to the defunct MotleyFool forum.
  • keef66
    keef66 Posts: 13,123
    My employer has provided some very good pension workshops / planning for retirement sessions, but they flatly refuse to give any personal financial advice or even recommend any IFAs so we're on our own.
  • orraloon wrote:
    Ok, maybe a simplistic thing to say no brainer to stay in final salary. However... rules n regs are making it much more onerous for an IFA to recommend a transfer out, even if enforcement of said is a bit lacking, witness the scammer fest which happened recently with the British Steel pension scheme in Newport.

    Guess if one has limited life expectancy then yes, look to get cash into the estate perhaps. But, this being a cycling forum...

    The rate of return on back payments of missing NI years is very good. Take that option if you can.

    If one has a mix of final salary and DC schemes, then I'd def be saying (as if I know squat) keep the final salary elements, and self manage in a SIPP the DC funds. Is what I do. Balance of risks and that.

    There is a lot of free guidance out there available, work out what you don't know and pay the IFA to fill in the gaps if you need to.

    Oh, and have a browse on the LemonFool forums for general investment advice; is the successor to the defunct MotleyFool forum.

    At 55 if he stays in the DB scheme he could be relying on the backing company being around for 30 years or depending on his pension levels he could get a nasty haircut.

    If going at 60 he may want the flexibility to take more money in the early years before his state pension kicks in.

    You are right though that a lot of the info is out there. I would probably argue that if he shares more details then there is probably enough knowledge in this thread to point out the options that he should be considering.
  • keef66 wrote:
    My employer has provided some very good pension workshops / planning for retirement sessions, but they flatly refuse to give any personal financial advice or even recommend any IFAs so we're on our own.

    they are not authorised to give financial advice.

    It would be useful to have an approved panel of IFAs but I can see why they don't want the liability of doing so.

    If you are happy to share more details then you will get most answers on here.

    Are you in the public sector? if not is your scheme fully funded and if not do you think the employer will still be around in 30 years time?
  • robert88
    robert88 Posts: 2,696
    orraloon wrote:
    Ok, maybe a simplistic thing to say no brainer to stay in final salary. However... rules n regs are making it much more onerous for an IFA to recommend a transfer out, even if enforcement of said is a bit lacking, witness the scammer fest which happened recently with the British Steel pension scheme in Newport.

    Guess if one has limited life expectancy then yes, look to get cash into the estate perhaps. But, this being a cycling forum...

    The rate of return on back payments of missing NI years is very good. Take that option if you can.

    If one has a mix of final salary and DC schemes, then I'd def be saying (as if I know squat) keep the final salary elements, and self manage in a SIPP the DC funds. Is what I do. Balance of risks and that.

    There is a lot of free guidance out there available, work out what you don't know and pay the IFA to fill in the gaps if you need to.

    Oh, and have a browse on the LemonFool forums for general investment advice; is the successor to the defunct MotleyFool forum.

    At 55 if he stays in the DB scheme he could be relying on the backing company being around for 30 years or depending on his pension levels he could get a nasty haircut.

    ..

    My DB pension is backed by a fund administered by trustees. According to the last report they are not dependent on the solvency of the company and the obligations are well funded. Check the trustees report.
  • orraloon
    orraloon Posts: 12,540
    A defined benefit scheme has the backstop of the Pension Protection Fund should the parent company go bust and / or shy away from its obligations to the legally separate pension scheme. Guarantees 90% (?) of level of benefits.

    Agree with SC, there will be a lot of basic knowledge available through this forum.
  • keef66
    keef66 Posts: 13,123
    Not public sector but a blue chip multinational which will almost certainly still be around in 30 years time. The final salary scheme is fully funded and they've always injected more cash when it's looked like being in deficit. It was closed to new entrants 15 years ago and 5 years later they implemented an arbitrary age cut-off and I was one of those bumped from the FS scheme into the DC scheme but with significantly enhanced employer contributions as compensation. Still likely worse off but I'm not spending my retirement taking them to court...

    My instinct is to take the certainty of the FS and State pensions, and do something more interesting / flexible with the 2 DC pots, but we will using an IFA to make sure we're not doing anything daft.
  • orraloon wrote:
    A defined benefit scheme has the backstop of the Pension Protection Fund should the parent company go bust and / or shy away from its obligations to the legally separate pension scheme. Guarantees 90% (?) of level of benefits.

    Agree with SC, there will be a lot of basic knowledge available through this forum.

    with a max of £35k, though I think nobody can lose more than 50%

    If you take early retirement then that does not spare you if the worst happens
  • capt_slog
    capt_slog Posts: 3,931
    I don't know much about works pensions and how they work but I have had a look at the State Pension recently and have advice that might help/you're not aware of...

    If you've paid NI contributions for most of your working life or had 'credits', you'll be entitled to a State Pension if you have 35+ years. When I looked before Christmas, mine was £143 per week (when I get to 66 based on today's figures) having earned 44 years of full contributions

    It turns out that although my contributions to NI are described as 'full', this doesn't mean quite what it says; my employers had paid a lower figure due to "contracting out" (some of the payment went towards my pension) and so I get a lower figure than the max full state pension of £164 a week.

    The important bit: I intend to retire at 60 (this year). Apparently, I can get the higher state pension of £164 per week if I promote my NI entitlement by paying class 3 NI contributions for the next 6 years, and this is £13 a week at the present rate. It's also possible to pay for some past years as a lump sum. If you're unsure, get a Government Gateway account and look up your figures.


    The older I get, the better I was.

  • Mad_Malx
    Mad_Malx Posts: 4,986
    Slog's comments about 'full pension' and the last paragraph are important.
    For the state pension, being contracted out and the number of post-2016 years can make a big difference.

    Mrs MM was recently advised that is was NOT worth her topping up (pre-2016) partial past years. The continue paying before collecting the state pension (which will be 67 for us) would be a good investment.
  • orraloon
    orraloon Posts: 12,540
    edited January 2019
    This guide to Topping Up State Pension may be useful

    https://www.royallondon.com/siteassets/ ... -guide.pdf

    Edited
    Oh, and meant to say beware IFAs who after the one off advice fee try to flog you an ongoing 'management service' which will be a % of funds value per annum for doing what you can do yourself at zero cost.
  • orraloon wrote:
    This guide to Topping Up State Pension may be useful

    https://www.royallondon.com/siteassets/ ... -guide.pdf

    now that is a good guide
  • keef66
    keef66 Posts: 13,123
    orraloon wrote:
    This guide to Topping Up State Pension may be useful

    https://www.royallondon.com/siteassets/ ... -guide.pdf

    now that is a good guide

    The fact that it runs to 28 pages is testament to the complexity of the whole thing!
  • navrig2
    navrig2 Posts: 1,832
    keef66 wrote:
    Sticking with a final salary scheme isn't always a no-brainer.

    I had a pension forecast based upon a closed DB scheme. I transferred it out after getting a quote and some formal advice.

    I did this at 55 (last year) and would suggest that there are limitations as to what you can do at this stage. Your wife will have some spare threshold in her pension and you may be able to get some advice about topping up her pot rather than your own so you pay less tax and she still pays none - all after retirement obviously.
  • dalebonnicp37
    dalebonnicp37 Posts: 3
    edited October 2022
    She can get a financial plan. Plenty of companies help people deal with this kind of problem. They can help you with the financial part. For instance, a friend working for the thefinitygroup.com company told me about this opportunity. All you need to do is to contact a company representative, and they will take care of the rest. Still, you better consult a financial advisor, someone who you can trust. Just to ensure that you are making a good and firm decision. Anyway, I hope you will be able to help your wife solve this problem.