A bit of friendly advice, I am fast approaching 55 and have started to think about what to do with my pension. After a bit of digging around it is now pensionS! I worked for a few different firms in my late teens and early 20's, an age when pensions were hardly top of my priority list and although I knew I had a couple of small plans going I had not thought about my first employer, certainly not when my last illustration from them was predicting an annual pension of about £60 per annum. Like many of my generation I started work in a bank, Barclays Bank at the age of 18, I left 4 years later and thought no more of that job really. Pension funds have made a lot of effort to track down members over the past 20 years and if you have received one of those "tracer" letters do not ignore it. More through luck than judgement I was enrolled into the 1964 Barclays Pension non-contributory scheme. After a tip off from another Barclays employee of the same era I contacted the firm who do look after this scheme and have discovered that I have a not insignificant fund sitting there.
So if you worked for a large financial institution in your youth and are of an age before these schemes were scrapped do look into it, no matter how short your employ was. Easily done on the internet. Wills Towers Watson deal with Barclays for example.
No wonder
@Covered End can afford Lords tickets every year! (he was my section head 30 odd years ago).
Comments
Sadly I have just been rumped for the second time in 10 years for my pension. At 37 I had 17 years of a decent pot building up to a guaranteed amount when I decide to retire. For the next 30 odd years I am essentially only building up an endowment where I can actually lose money. Which is fucking shit and makes me kick myself as I could have left for a much more lucrative self employed role and fucked myself over for a non-pension.
Sorry for hijacking to have a blow, good on you for sharing he information
Seriously though.....what do you mean "esentially only building up a endowment where I can actually lose money..."
I'm assuming you mean you have a define contribution scheme where your & your employers payments go into a group (personal) pension. Still not bad & has certain benefits that a final salary (guaranteed as you put it) doesn't have. Flexibility & the option to pass it all tax free to your dependanrs on death being just 2.
Also......always check what funds you are invested in. You could be in the "default" fund.....which could be a middle of the road managed fund, or (like one I saw earlier this week) mainly cash & gilts......not the place to be over the past 10 years. If you don't do anything else, check the investments you are in & the other choices open to you.
And yes, changing from.a DB scheme to a DC scheme will leave you worse off. Probably by around 25%-30%. DB schemes are very expensive to run & virtually all have been closed (or being phased out)
What offends me is I work for a successful firm, I feel that morally our pensions should have been honoured, I understand how the world works and that money for the workers has to be taken for director bonuses, shareholder dividends and generally to keep the money men in the city bubbly in the gusset however ethically it stinks and has made me feel a prick that I have given so much of my life to my employers when I could have gone elsewhere years ago, earned more and invested that myself at personal risk which is essentially what my choice is now. The irony of cutbacks to essential services apparently necessary to pay off a huge debt caused by the same people who are responsible for ensuring no matter how much overtime or callouts I do (now completely non-pensionable) I'm now working into my sixties whereas before I had a chance of retiring while still relatively young and living with some dignity.
My wife started work aged 16 for Lloyds then moved to Barclays before leaving work at the age of 22 to have a baby. I figured it wasn't to be worth a fortune. Nevertheless, I felt it was important to follow through. Long story short, I received a cheque for £1350. I arranged a lovely family meal in her memory, before dividing the rest between our three children. I'm sure my late wife would have liked that.
As you say @Riviera not a fortune but definitely worth chasing up.
I can worry about the drawdown/annuity questions later.
@golfaddick - you may be getting a call in the New Year
PS or invest in Peckham Spring
I have it in my pocket.
It's not just you.....virtually all workers in DB schemes have had this change. I know the NHS Pension inside out & the changes there are similar too. Gone from final salary to "career average" (crap definition btw). Retirement age gone from 60 to 65....and now to SRA. Contributions gone from a standard 6% for all workers (5% for porters etc) to as much as 13% for the top earners, and like you some "bonuses" (Clinical Excellence Awards) have become non pensionable.
One thing that is a bonus is that if you've gone from a DB scheme to a DC scheme the calculation for your Annual Allowance "pot" is a damn sight easier to work out !!
At the time I thought it was a good idea as I planned to live out my life at that company. Things didn’t work out that way and basically I had wasted my money paying into it as I took it out after 1987 and wouldn’t be able to take a cash lump sum, wouldn’t be able to add to it or move it to another employers and would have to buy an annuity with it 25 years in the future which would pay me next to nothing for life.
Thankfully there was a change in law and now being 55 years old I can take the lot with 25% of it tax free. So next April when the tax freehold increases I will be taking the lot. I will have to pay higher rate of tax on some of it but I did have tax relief on contributions when I paid into it. Can’t have it both ways but that’s only fair, we all need to pay taxes.
Better in my pocket now than when I’m old and the only pleasure I can get from money is to count it. It’s not a life changer amount but not to be sniffed at either.
And once you have this money....what do you do with it ?? Put it in a bank earning diddly squat ??
I think I should be recommending my services.....
Just fade away into the background, whilst they continue to pay you and put into your pension.