Savings and Investments thread
Comments
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I'd certainly agree the UK tax system/law is massively over complicated. Mainly because everyone has been to scared to make wholesale changes. It's just adding a new rule here, a new rule there. I'm getting on a bit having been working now for 30+ years, but when I think back to the numerous pension changes i've probably forgotten half of them, MIRAS, Personal allowance, Do you/don't you get child benefit, NI Changes, Married Mans allowance, Stamp duty changes and thats probably the tip of the iceberg.PragueAddick said:
I mean, really, what a load of old bollocks. I don't refer to you of course, but to the reasoning you are revealing. Show that to an average person and ask them if they understand a word. If the UK wants people to take responsibility for their own pensions,( a sentiment I agree with, within reason) then bloody well make it simple. But then that's just part of the complete massive mess which is the UK tax law.golfaddick said:
I expect it's because, as stated the other day, that there is a definitive distinction between a Personal pension (be it a PP, a Stakeholder or a Sipp) and a Drawdown plan. A drawdown pension (or to give it its proper name, a FLEXI-access drawdown scheme) has different tax treatments than a normal pension and has to distinguish between crystalised & uncrystalised funds.PragueAddick said:
I definitely agree with that. But it's at a piece with the entire tax regime, and designed to enrich the financial services industry as usual.stevexreeve said:
Sorry!golfaddick said:
Again, wrong.stevexreeve said:
Might be worth mentioning that once you've taken anything out of your pension, you can only pay 4K per year into any pension from then on. I think that's right?LargeAddick said:question for an IFA if there is one on here .... and these are hypothetical figures.
If someone is about to reach 55 and has £300k in their pension pot they are entitled to take £75k (25%) as a tax free lump sum. However, they only want to take £25k leaving the rest in to hopefully increase in value, so they do this reducing their pot to £275k.
In five years time their pot is now worth £400k and they want to take the rest of their 25% tax free sum. Is it then calculated as 25% of £400k so £100k less the £25k previously taken so meaning they can take a further £75k?
You can potentially lose a lot of future tax relief by dipping in for a quick 25K.
The £4k limit only applies once you start taking payments AFTER you have taken the tax-free element.
The whole thing seems ridiculously complicated - almost designed to discourage reluctant young people from saving!
Should everybody who is still working take that tax free element at 55 and recycle it back into another pension so they can claim even more tax relief?
I'm too old to worry about this anyway!
For example, I have a SIPP which is now on the Hargreaves Lansdowne platform. In my naivety I supposed that I can just directly withdraw amounts up to the limit directly. Oh no. For a reason which is not explained, I have to apply to make it a drawdown pension. H-L claims that there are no extra charges. I am not sure I believe that, but either way, why do we have this bureaucracy?
It's so over complicated.
Starting to question if it was wise to start paying into my pension again..........0 -
About the only thing I give Gordon Brown credit for is pension simplification, which came into force in 2006. No more AVC's, FSAVC's, Personal Pensions, Retirement Annuity Contracts. Just 1 simple Personal Pension (until they added I Stakeholders). And that you could transfer the whole lot into 1.......and still get a 25% tax free payment upon retirement (which you couldn't get from your AVc's or FSAVC's). I transferred 4 old schemes into 1.Rob7Lee said:
I'd certainly agree the UK tax system/law is massively over complicated. Mainly because everyone has been to scared to make wholesale changes. It's just adding a new rule here, a new rule there. I'm getting on a bit having been working now for 30+ years, but when I think back to the numerous pension changes i've probably forgotten half of them, MIRAS, Personal allowance, Do you/don't you get child benefit, NI Changes, Married Mans allowance, Stamp duty changes and thats probably the tip of the iceberg.PragueAddick said:
I mean, really, what a load of old bollocks. I don't refer to you of course, but to the reasoning you are revealing. Show that to an average person and ask them if they understand a word. If the UK wants people to take responsibility for their own pensions,( a sentiment I agree with, within reason) then bloody well make it simple. But then that's just part of the complete massive mess which is the UK tax law.golfaddick said:
I expect it's because, as stated the other day, that there is a definitive distinction between a Personal pension (be it a PP, a Stakeholder or a Sipp) and a Drawdown plan. A drawdown pension (or to give it its proper name, a FLEXI-access drawdown scheme) has different tax treatments than a normal pension and has to distinguish between crystalised & uncrystalised funds.PragueAddick said:
I definitely agree with that. But it's at a piece with the entire tax regime, and designed to enrich the financial services industry as usual.stevexreeve said:
Sorry!golfaddick said:
Again, wrong.stevexreeve said:
Might be worth mentioning that once you've taken anything out of your pension, you can only pay 4K per year into any pension from then on. I think that's right?LargeAddick said:question for an IFA if there is one on here .... and these are hypothetical figures.
If someone is about to reach 55 and has £300k in their pension pot they are entitled to take £75k (25%) as a tax free lump sum. However, they only want to take £25k leaving the rest in to hopefully increase in value, so they do this reducing their pot to £275k.
In five years time their pot is now worth £400k and they want to take the rest of their 25% tax free sum. Is it then calculated as 25% of £400k so £100k less the £25k previously taken so meaning they can take a further £75k?
You can potentially lose a lot of future tax relief by dipping in for a quick 25K.
The £4k limit only applies once you start taking payments AFTER you have taken the tax-free element.
The whole thing seems ridiculously complicated - almost designed to discourage reluctant young people from saving!
Should everybody who is still working take that tax free element at 55 and recycle it back into another pension so they can claim even more tax relief?
I'm too old to worry about this anyway!
For example, I have a SIPP which is now on the Hargreaves Lansdowne platform. In my naivety I supposed that I can just directly withdraw amounts up to the limit directly. Oh no. For a reason which is not explained, I have to apply to make it a drawdown pension. H-L claims that there are no extra charges. I am not sure I believe that, but either way, why do we have this bureaucracy?
It's so over complicated.
Starting to question if it was wise to start paying into my pension again..........
Then I take away all my praise for him as at the same time the Annual Allowance & the Lifetime Allowance were introduced. The Annual allowance started off at £265k.......its now £40k. The Lifetime Allowance started off at £1.5m and went up steadily to £1.8m. In 2010 when the Coalition came in it was supposed to go up to £2m. Instead it has steadily decreased & currently stands at just under £1.1m. This is where the silent tax take has been coming from. I understand all the righteous indignation over wellfare cuts & the pain austerity has caused to millions of working class folk, but many of them have no idea how much tax is being taken at the upper end of the scale. And I'm not talking about millionaires, footballers or businessman. Just your ordinary GP, Hospital Consultant & Head Teacher.
Anyway.....mustn't grumble. All these changes have kept me in a job.....😄
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Does anybody here invest using their Lifetime ISA allowance?
Is it all smooth sailing? I just my Stocks and Share ISA but won't be topping up to the max, so think this may be a more suitable vehicle for a safe fund.0 -
My daughter has a lifetime ISA, £4k a year, mainly good for buying your first property as it can only be used for that or pension, you can take the money out but would lose 25%. I'm too old.......mendonca said:Does anybody here invest using their Lifetime ISA allowance?
Is it all smooth sailing? I just my Stocks and Share ISA but won't be topping up to the max, so think this may be a more suitable vehicle for a safe fund.
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Thanks!
On a Pension note, my Dad continued to invest his pension since retirement and it has grown well with it's investment in equity/managed funds. He's filling in the forms to now sell the funds and move the pension (from Zurich to Hargreaves), but this process can take upto 6 weeks I believe.
What with the US election and current state of markets, is it advisable that he continues to get this going this week, or if he doesn't need to income before end of year, wait and hold off to see how Biden/Trump shake or shape the Global markets?
He was looking to kick-start this process in March, then saw the markets collapse, then saw them perform better than expected. Are clients looking to move forwards with their pension plans being advised something specific in the current climate @golfaddick?0 -
Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
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On the 2nd point, is it a final salary scheme or money purchase?meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forest is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
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if at least 17 years old it's likely a final salary scheme I'd have thoughtRob7Lee said:
On the 2nd point, is it a final salary scheme or money purchase?meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forest is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
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Hi Rob7Lee. I can't see that it actually states what it is in my latest retirement quotation. If it helps, it's the "NatWest Bank Group Pension Fund Schedule". Transfer benefits value is £508K. "Preserved Pensioner". There is a salary history showing my annual salaries during my employment there so maybe that suggests it is not a final salary scheme. Does that help?Rob7Lee said:
On the 2nd point, is it a final salary scheme or money purchase?meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forest is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
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508k isn't to be sneezed at ....0
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……..their pension video says that the fund will keep up with inflation and will not be affected by a drop in value of investments. Does that tell you what type of pension it is?
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I would assume it's a final salary scheme if they have a record of your salaries whilst you were working there, but would need to see the actual paperwork to be sure. Also, a fund size of £508k would again assume a FS scheme as I doubt it would have built up that amount just by monthly contributions (and growth), as well as saying that it goes ip with inflation & is not affected by a drop in the value of investments.meldrew66 said:……..their pension video says that the fund will keep up with inflation and will not be affected by a drop in value of investments. Does that tell you what type of pension it is?
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You can get a year by year breakdown of your NI record on the HMRC site. This might tell you the reason why the are saying you still need another 4 years. I don't think its because you have been in contracted out schemes as that usually takes care of itself by the amount you get at retirement ......which might not be the standard pension figures for the new State Pension. I would imagine yours will be around £30 pw less because of this.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
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Usually, when you move pension funds from one provider to another, the ceeding scheme (old provider) will sell down the funds once they have ALL the paperwork they need. This might not only be the request from the new provider but also signed declarations from the client as well as other forms saying that you have / have not been given advice & have read any accompanying guidance notes. This is what usually holds up a transfer. Once the funds have been sold down & are in cash then this amount will be sent to the new provider. There is a new system in place (Origo) to transfer the cash speedily so that the client is not out of the market for too long a period of time, but even with the new system in place you would be looking at least 7-10 days.mendonca said:Thanks!
On a Pension note, my Dad continued to invest his pension since retirement and it has grown well with it's investment in equity/managed funds. He's filling in the forms to now sell the funds and move the pension (from Zurich to Hargreaves), but this process can take upto 6 weeks I believe.
What with the US election and current state of markets, is it advisable that he continues to get this going this week, or if he doesn't need to income before end of year, wait and hold off to see how Biden/Trump shake or shape the Global markets?
He was looking to kick-start this process in March, then saw the markets collapse, then saw them perform better than expected. Are clients looking to move forwards with their pension plans being advised something specific in the current climate @golfaddick?
To be honest there will always be a time lag or a period when you are out of the market. Not much can be done about it & fingers crossed your father doesn't sell or buy at the wrong moment.......but I wouldn't hold it up because of US elections or Brexit deals0 -
Not an expert but a mate of mine & my BiL despite same age as me and all of us been working since we were all 16, both of them have not as yet maxed their State Pension although I have, made some enquiries, even spoke to HMRC and it’s because my NI contributions have been a lot higher than theirs. Not sure what you can do to but it might be worth giving HMRC a call, but firstly check your NI record on the HMRC/Gov website.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
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A couple of things to note.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
Should you want to transfer the NW scheme away from them & into a Pension of your own you will need specialist advice.. ..and that doesn't come cheap anymore. Starting figure would be around £5k and that is just for the report detailing the benefits of the NW scheme & whether it is better left where it is or not. The new FCA guidelines start with the premise that it is always worse off to transfer unless the report can prove otherwise.
Also, if you do transfer the pension into your own scheme then you will have a fund of £500k to go against the Lifetime Allowance (currently £1,070,000). It would only need an NHS pension of £25k pa (plus the £75k lump sum) to send you over the LTA and thus subject to an excess tax charge.
First thing I would ask is what pension are NW offering at age 60. Then, what are you expecting from the NHS. Once you have these figures you will be in a better position to decide what to do next.0 -
golfaddick said:
You can get a year by year breakdown of your NI record on the HMRC site. This might tell you the reason why the are saying you still need another 4 years. I don't think its because you have been in contracted out schemes as that usually takes care of itself by the amount you get at retirement ......which might not be the standard pension figures for the new State Pension. I would imagine yours will be around £30 pw less because of this.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
Hi Golfie. Yes, I did get that year-by-year breakdown and manually added it up to a total of 38+ years. that's what's I don't understand.0 -
LargeAddick said:508k isn't to be sneezed at ....
Hi Large …… that's what I was thinking but when I tell you that the age 60 retirement illustration translates into an annual pension of just £13,388 OR cash of £79198 + annual pension of just £11,880, it doesn't feel that great for 19 years of service in what (I thought) was seen as a strong Bank pension.0 -
Daarrzzetbum said:
Not an expert but a mate of mine & my BiL despite same age as me and all of us been working since we were all 16, both of them have not as yet maxed their State Pension although I have, made some enquiries, even spoke to HMRC and it’s because my NI contributions have been a lot higher than theirs. Not sure what you can do to but it might be worth giving HMRC a call, but firstly check your NI record on the HMRC/Gov website.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
Thanks Daarrz………..I might well call them as the year-by-year NI breakdown shows 'full payment' for every year. The pay at NatWest wasn't amazing (I left as a branch manager of £22k in 2003 after 19 years of service!) but probably decent enough to count each and every year I would have thought. Since, joining the NHS 17 years ago, my salary has been at least double the average wage in the UK. Weird huh?
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Its definitely a final salary scheme if they are giving you those figures.meldrew66 said:LargeAddick said:508k isn't to be sneezed at ....
Hi Large …… that's what I was thinking but when I tell you that the age 60 retirement illustration translates into an annual pension of just £13,388 OR cash of £79198 + annual pension of just £11,880, it doesn't feel that great for 19 years of service in what (I thought) was seen as a strong Bank pension.
Don't forget those figures are based on your salary when you left and (depending on the scheme) increases to the deferred pension in line with inflation /CPI0 - Sponsored links:
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Not necessarily true about taking advice. About 18 months ago I decided to transfer my Scottish Widows stakeholder pension into a Hargreaves Lansdown drawdown SIPP. After taking my 25% tax-free lump I was left with £149k which I then selected 14 funds to invest in - based mainly on advice seen on here from you, @PragueAddick, @Rob7lee and maybe one or two others...it's now worth £175k. Not actually drawing anything as I have 3 other pensions and would be paying higher-rate tax. Did find that once transferred the HL drawdown process (for on-demand occasional sums and not a regular amount) were easy to understand.golfaddick said:
A couple of things to note.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
Should you want to transfer the NW scheme away from them & into a Pension of your own you will need specialist advice.. ..and that doesn't come cheap anymore. Starting figure would be around £5k and that is just for the report detailing the benefits of the NW scheme & whether it is better left where it is or not. The new FCA guidelines start with the premise that it is always worse off to transfer unless the report can prove otherwise.
Also, if you do transfer the pension into your own scheme then you will have a fund of £500k to go against the Lifetime Allowance (currently £1,070,000). It would only need an NHS pension of £25k pa (plus the £75k lump sum) to send you over the LTA and thus subject to an excess tax charge.
First thing I would ask is what pension are NW offering at age 60. Then, what are you expecting from the NHS. Once you have these figures you will be in a better position to decide what to do next.0 -
Typical defined benefit pensions would be 1/60th of pensionable salary for each year of service. For 19 years service that would be 19/60ths of your salary at the time of leaving and the £13,388 might be based on that figure rather than what it might be now based on inflation.meldrew66 said:LargeAddick said:508k isn't to be sneezed at ....
Hi Large …… that's what I was thinking but when I tell you that the age 60 retirement illustration translates into an annual pension of just £13,388 OR cash of £79198 + annual pension of just £11,880, it doesn't feel that great for 19 years of service in what (I thought) was seen as a strong Bank pension.
If it is based on your salary at the time of leaving the scheme then £13,388 as 19/60ths of your final salary would equate to your salary when leaving Nat West of just over £42k - does that sound about right?0 -
To be clear, I was talking about transferring a final salary (DB) scheme. It true that you don't need advice about transferring DC schemes.......but you should !cafc-west said:
Not necessarily true about taking advice. About 18 months ago I decided to transfer my Scottish Widows stakeholder pension into a Hargreaves Lansdown drawdown SIPP. After taking my 25% tax-free lump I was left with £149k which I then selected 14 funds to invest in - based mainly on advice seen on here from you, @PragueAddick, @Rob7lee and maybe one or two others...it's now worth £175k. Not actually drawing anything as I have 3 other pensions and would be paying higher-rate tax. Did find that once transferred the HL drawdown process (for on-demand occasional sums and not a regular amount) were easy to understand.golfaddick said:
A couple of things to note.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
Should you want to transfer the NW scheme away from them & into a Pension of your own you will need specialist advice.. ..and that doesn't come cheap anymore. Starting figure would be around £5k and that is just for the report detailing the benefits of the NW scheme & whether it is better left where it is or not. The new FCA guidelines start with the premise that it is always worse off to transfer unless the report can prove otherwise.
Also, if you do transfer the pension into your own scheme then you will have a fund of £500k to go against the Lifetime Allowance (currently £1,070,000). It would only need an NHS pension of £25k pa (plus the £75k lump sum) to send you over the LTA and thus subject to an excess tax charge.
First thing I would ask is what pension are NW offering at age 60. Then, what are you expecting from the NHS. Once you have these figures you will be in a better position to decide what to do next.0 -
Ahh OK - yes that makes sense! 2 of my pensions were final salary schemes and there was no way I would move them! Yes I picked funds largely suggested on here. The ones I picked myself have been the worst performing...golfaddick said:
To be clear, I was talking about transferring a final salary (DB) scheme. It true that you don't need advice about transferring DC schemes.......but you should !cafc-west said:
Not necessarily true about taking advice. About 18 months ago I decided to transfer my Scottish Widows stakeholder pension into a Hargreaves Lansdown drawdown SIPP. After taking my 25% tax-free lump I was left with £149k which I then selected 14 funds to invest in - based mainly on advice seen on here from you, @PragueAddick, @Rob7lee and maybe one or two others...it's now worth £175k. Not actually drawing anything as I have 3 other pensions and would be paying higher-rate tax. Did find that once transferred the HL drawdown process (for on-demand occasional sums and not a regular amount) were easy to understand.golfaddick said:
A couple of things to note.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
Should you want to transfer the NW scheme away from them & into a Pension of your own you will need specialist advice.. ..and that doesn't come cheap anymore. Starting figure would be around £5k and that is just for the report detailing the benefits of the NW scheme & whether it is better left where it is or not. The new FCA guidelines start with the premise that it is always worse off to transfer unless the report can prove otherwise.
Also, if you do transfer the pension into your own scheme then you will have a fund of £500k to go against the Lifetime Allowance (currently £1,070,000). It would only need an NHS pension of £25k pa (plus the £75k lump sum) to send you over the LTA and thus subject to an excess tax charge.
First thing I would ask is what pension are NW offering at age 60. Then, what are you expecting from the NHS. Once you have these figures you will be in a better position to decide what to do next.0 -
And that's why people should take advice. Not knocking you, but I spend all day talking & listening to fund managers as well as spending hours researching funds.cafc-west said:
Ahh OK - yes that makes sense! 2 of my pensions were final salary schemes and there was no way I would move them! Yes I picked funds largely suggested on here. The ones I picked myself have been the worst performing...golfaddick said:
To be clear, I was talking about transferring a final salary (DB) scheme. It true that you don't need advice about transferring DC schemes.......but you should !cafc-west said:
Not necessarily true about taking advice. About 18 months ago I decided to transfer my Scottish Widows stakeholder pension into a Hargreaves Lansdown drawdown SIPP. After taking my 25% tax-free lump I was left with £149k which I then selected 14 funds to invest in - based mainly on advice seen on here from you, @PragueAddick, @Rob7lee and maybe one or two others...it's now worth £175k. Not actually drawing anything as I have 3 other pensions and would be paying higher-rate tax. Did find that once transferred the HL drawdown process (for on-demand occasional sums and not a regular amount) were easy to understand.golfaddick said:
A couple of things to note.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
Should you want to transfer the NW scheme away from them & into a Pension of your own you will need specialist advice.. ..and that doesn't come cheap anymore. Starting figure would be around £5k and that is just for the report detailing the benefits of the NW scheme & whether it is better left where it is or not. The new FCA guidelines start with the premise that it is always worse off to transfer unless the report can prove otherwise.
Also, if you do transfer the pension into your own scheme then you will have a fund of £500k to go against the Lifetime Allowance (currently £1,070,000). It would only need an NHS pension of £25k pa (plus the £75k lump sum) to send you over the LTA and thus subject to an excess tax charge.
First thing I would ask is what pension are NW offering at age 60. Then, what are you expecting from the NHS. Once you have these figures you will be in a better position to decide what to do next.0 -
Of course you are right...but at the time there was some good recommendations on here. What I should have done is put more money into those like Baillie Gifford American, Fidelity Global Healthcare and Polar Capital Global Technology that have all performed really well - but thought (as I like to dabble) that I'd do some research myself. None of therm have made massive losses but haven't performed as well as hoped...you live and learn I guess. An overall growth of nearly 20% in under 18 months is OK though I think.golfaddick said:
And that's why people should take advice. Not knocking you, but I spend all day talking & listening to fund managers as well as spending hours researching funds.cafc-west said:
Ahh OK - yes that makes sense! 2 of my pensions were final salary schemes and there was no way I would move them! Yes I picked funds largely suggested on here. The ones I picked myself have been the worst performing...golfaddick said:
To be clear, I was talking about transferring a final salary (DB) scheme. It true that you don't need advice about transferring DC schemes.......but you should !cafc-west said:
Not necessarily true about taking advice. About 18 months ago I decided to transfer my Scottish Widows stakeholder pension into a Hargreaves Lansdown drawdown SIPP. After taking my 25% tax-free lump I was left with £149k which I then selected 14 funds to invest in - based mainly on advice seen on here from you, @PragueAddick, @Rob7lee and maybe one or two others...it's now worth £175k. Not actually drawing anything as I have 3 other pensions and would be paying higher-rate tax. Did find that once transferred the HL drawdown process (for on-demand occasional sums and not a regular amount) were easy to understand.golfaddick said:
A couple of things to note.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
Should you want to transfer the NW scheme away from them & into a Pension of your own you will need specialist advice.. ..and that doesn't come cheap anymore. Starting figure would be around £5k and that is just for the report detailing the benefits of the NW scheme & whether it is better left where it is or not. The new FCA guidelines start with the premise that it is always worse off to transfer unless the report can prove otherwise.
Also, if you do transfer the pension into your own scheme then you will have a fund of £500k to go against the Lifetime Allowance (currently £1,070,000). It would only need an NHS pension of £25k pa (plus the £75k lump sum) to send you over the LTA and thus subject to an excess tax charge.
First thing I would ask is what pension are NW offering at age 60. Then, what are you expecting from the NHS. Once you have these figures you will be in a better position to decide what to do next.0 -
golfaddick said:
A couple of things to note.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
Should you want to transfer the NW scheme away from them & into a Pension of your own you will need specialist advice.. ..and that doesn't come cheap anymore. Starting figure would be around £5k and that is just for the report detailing the benefits of the NW scheme & whether it is better left where it is or not. The new FCA guidelines start with the premise that it is always worse off to transfer unless the report can prove otherwise.
Also, if you do transfer the pension into your own scheme then you will have a fund of £500k to go against the Lifetime Allowance (currently £1,070,000). It would only need an NHS pension of £25k pa (plus the £75k lump sum) to send you over the LTA and thus subject to an excess tax charge.
First thing I would ask is what pension are NW offering at age 60. Then, what are you expecting from the NHS. Once you have these figures you will be in a better position to decide what to do next.
Thanks Golfie. Regarding the NHS pension, it is split in 2; 1995 scheme and 2015 scheme with the former drawable at age 60 (which is my intention) and the latter at 67. Hypothetical annuities are £584k + £300k. 1995 scheme doesn't change from year to year and taking the maximum cash pays a lump sum of £63k + annual pension of £11,677. The 2015 scheme does increase noticeably each year and is currently paying max cash of £32k with an annual pension of £4,666. What do you reckon?0 -
Yes Bob, probably not far off it once adding in the other pensionable income such as London Weighting, bonuses etc. I guess the question in my head is whether or not I should be expecting my pension fund to have 'grown' under NatWest's fund and, if it hasn't, should it have?bobmunro said:
Typical defined benefit pensions would be 1/60th of pensionable salary for each year of service. For 19 years service that would be 19/60ths of your salary at the time of leaving and the £13,388 might be based on that figure rather than what it might be now based on inflation.meldrew66 said:LargeAddick said:508k isn't to be sneezed at ....
Hi Large …… that's what I was thinking but when I tell you that the age 60 retirement illustration translates into an annual pension of just £13,388 OR cash of £79198 + annual pension of just £11,880, it doesn't feel that great for 19 years of service in what (I thought) was seen as a strong Bank pension.
If it is based on your salary at the time of leaving the scheme then £13,388 as 19/60ths of your final salary would equate to your salary when leaving Nat West of just over £42k - does that sound about right?
0 -
A defined benefit scheme's payments are guaranteed and have no variation based on the pension fund's investment success or otherwise - that's the responsibility of the scheme's trustees. It may have performed well, it may have performed badly - either way it doesn't vary your defined benefits.meldrew66 said:
Yes Bob, probably not far off it once adding in the other pensionable income such as London Weighting, bonuses etc. I guess the question in my head is whether or not I should be expecting my pension fund to have 'grown' under NatWest's fund and, if it hasn't, should it have?bobmunro said:
Typical defined benefit pensions would be 1/60th of pensionable salary for each year of service. For 19 years service that would be 19/60ths of your salary at the time of leaving and the £13,388 might be based on that figure rather than what it might be now based on inflation.meldrew66 said:LargeAddick said:508k isn't to be sneezed at ....
Hi Large …… that's what I was thinking but when I tell you that the age 60 retirement illustration translates into an annual pension of just £13,388 OR cash of £79198 + annual pension of just £11,880, it doesn't feel that great for 19 years of service in what (I thought) was seen as a strong Bank pension.
If it is based on your salary at the time of leaving the scheme then £13,388 as 19/60ths of your final salary would equate to your salary when leaving Nat West of just over £42k - does that sound about right?2 -
I know all about the NHS Scheme(s) as most of my clients are Doctors.meldrew66 said:golfaddick said:
A couple of things to note.meldrew66 said:Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
Should you want to transfer the NW scheme away from them & into a Pension of your own you will need specialist advice.. ..and that doesn't come cheap anymore. Starting figure would be around £5k and that is just for the report detailing the benefits of the NW scheme & whether it is better left where it is or not. The new FCA guidelines start with the premise that it is always worse off to transfer unless the report can prove otherwise.
Also, if you do transfer the pension into your own scheme then you will have a fund of £500k to go against the Lifetime Allowance (currently £1,070,000). It would only need an NHS pension of £25k pa (plus the £75k lump sum) to send you over the LTA and thus subject to an excess tax charge.
First thing I would ask is what pension are NW offering at age 60. Then, what are you expecting from the NHS. Once you have these figures you will be in a better position to decide what to do next.
Thanks Golfie. Regarding the NHS pension, it is split in 2; 1995 scheme and 2015 scheme with the former drawable at age 60 (which is my intention) and the latter at 67. Hypothetical annuities are £584k + £300k. 1995 scheme doesn't change from year to year and taking the maximum cash pays a lump sum of £63k + annual pension of £11,677. The 2015 scheme does increase noticeably each year and is currently paying max cash of £32k with an annual pension of £4,666. What do you reckon?
Firstly, forget about the hypothetical annuity figures as they don't mean a thing with regard to the NHS Scheme.
The 1995 scheme should still grow every year in line with CPI. They might not show it, but it does.
The 2015 scheme is a CARE scheme (career average) and basically every year you get a "chunk" of pension (1/54th) based upon your salary that year. As every year goes by each individual "chuck" gets uprated in line with inflation and upon retirement are added together to give you your annual pension. This is why you see it increasing "noticeably" as you are simply building up your annual pension year by year. Note - there is no automatic lump sum with the 2015 scheme, If you want to take a tax-free lump sum you have to give up a portion of your pension to do so (on a 12-1 basis).
Also remember, if you take the 2015 before age 67 then there is an actuarial reduction for every year you take it early. If you took the 2015 scheme along with the 1995 scheme at age 60 then you would lose around 30% of the annual pension from the 2015 scheme. You can take the 1995 scheme at 60 & leave the 2015 scheme until age 67 so that you don't lose any pension if that works better for you.
Have you got your latest Total Reward statement ? These should have come out last month and are on the NHS Gateway site. This will give you the most up-to-date pension figs. Based on what you have said you might have a problem with the LTA if you transferred your NW scheme - but shouldn't if you left it where it was (assuming the figs you gave earlier are up to date)
I think you might need proper financial advice from an expert in the NHS pension scheme 1
