Any pension experts out there?
Comments
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golfaddick said:Nug said:I have a personal pension with Standard Life and was looking at it and have it invested in 7 funds of all sorts, US tracker, Far East, FTSE and a couple of Special Situations amongst them. I have a decent understanding of risk but have always thought I don't have the time or expertise to do better than a tracker fund. I've noticed that some of the funds have performed really badly. Should I simplify the allocations into a global tracker or use one of their lifesyle profiles? I'm 54.
Trackers are cheap but they do what they say on the tin - track the index/market/asset they are aligned to.
Ask @PragueAddick how his low cost Vanguard Lifestyle 20 fund did last year.0 -
Wheresmeticket? said:Covered End said:Wheresmeticket? said:I've got a pension with my current employer which will be worth around 17k at time of retirement (I took all my pensions from various jobs over the years as lump sums and put them into premium bonds) - their "calculator" seems to imply that I will get an income of £350 PER YEAR(!). Now I wasn't expecting to be zooming off to Costa Rica like some of you are but my calculations are that I would have to live for 48 years after reaching retirement age to break even. Now, I know I am not one of life's optimists but that seems to be pushing it. Why wouldn't I take the money as a lump sum (again) and pay my own income. Or spend it on drugs sanatogen and fast cars mobility scooters?
If you (need to) transfer it out in order to draw it down only 25% is tax free.
So if you took the whole lot in one lump sum you would presumably get smashed for 40% tax on the 75% that is taxable.
I transferred mine out into a SIPP and as I have no other income am drawing the maximum I can yearly without paying any tax.2 -
Covered End said:Wheresmeticket? said:I've got a pension with my current employer which will be worth around 17k at time of retirement (I took all my pensions from various jobs over the years as lump sums and put them into premium bonds) - their "calculator" seems to imply that I will get an income of £350 PER YEAR(!). Now I wasn't expecting to be zooming off to Costa Rica like some of you are but my calculations are that I would have to live for 48 years after reaching retirement age to break even. Now, I know I am not one of life's optimists but that seems to be pushing it. Why wouldn't I take the money as a lump sum (again) and pay my own income. Or spend it on drugs sanatogen and fast cars mobility scooters?
If you (need to) transfer it out in order to draw it down only 25% is tax free.
So if you took the whole lot in one lump sum you would presumably get smashed for 40% tax on the 75% that is taxable.
I transferred mine out into a SIPP and as I have no other income am drawing the maximum I can yearly without paying any tax.0 -
LargeAddick said:Covered End said:Wheresmeticket? said:I've got a pension with my current employer which will be worth around 17k at time of retirement (I took all my pensions from various jobs over the years as lump sums and put them into premium bonds) - their "calculator" seems to imply that I will get an income of £350 PER YEAR(!). Now I wasn't expecting to be zooming off to Costa Rica like some of you are but my calculations are that I would have to live for 48 years after reaching retirement age to break even. Now, I know I am not one of life's optimists but that seems to be pushing it. Why wouldn't I take the money as a lump sum (again) and pay my own income. Or spend it on drugs sanatogen and fast cars mobility scooters?
If you (need to) transfer it out in order to draw it down only 25% is tax free.
So if you took the whole lot in one lump sum you would presumably get smashed for 40% tax on the 75% that is taxable.
I transferred mine out into a SIPP and as I have no other income am drawing the maximum I can yearly without paying any tax.
So you will be paying tax on every penny of the pension income from elsewhere?
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LargeAddick said:Covered End said:Wheresmeticket? said:I've got a pension with my current employer which will be worth around 17k at time of retirement (I took all my pensions from various jobs over the years as lump sums and put them into premium bonds) - their "calculator" seems to imply that I will get an income of £350 PER YEAR(!). Now I wasn't expecting to be zooming off to Costa Rica like some of you are but my calculations are that I would have to live for 48 years after reaching retirement age to break even. Now, I know I am not one of life's optimists but that seems to be pushing it. Why wouldn't I take the money as a lump sum (again) and pay my own income. Or spend it on drugs sanatogen and fast cars mobility scooters?
If you (need to) transfer it out in order to draw it down only 25% is tax free.
So if you took the whole lot in one lump sum you would presumably get smashed for 40% tax on the 75% that is taxable.
I transferred mine out into a SIPP and as I have no other income am drawing the maximum I can yearly without paying any tax.
Assume you've already taken 25% tax free?0 -
golfaddick said:Nug said:I have a personal pension with Standard Life and was looking at it and have it invested in 7 funds of all sorts, US tracker, Far East, FTSE and a couple of Special Situations amongst them. I have a decent understanding of risk but have always thought I don't have the time or expertise to do better than a tracker fund. I've noticed that some of the funds have performed really badly. Should I simplify the allocations into a global tracker or use one of their lifesyle profiles? I'm 54.
Trackers are cheap but they do what they say on the tin - track the index/market/asset they are aligned to.
Ask @PragueAddick how his low cost Vanguard Lifestyle 20 fund did last year.0 -
AFKABartram said:Scares me how little of this I understand1
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bobmunro said:LargeAddick said:Covered End said:Wheresmeticket? said:I've got a pension with my current employer which will be worth around 17k at time of retirement (I took all my pensions from various jobs over the years as lump sums and put them into premium bonds) - their "calculator" seems to imply that I will get an income of £350 PER YEAR(!). Now I wasn't expecting to be zooming off to Costa Rica like some of you are but my calculations are that I would have to live for 48 years after reaching retirement age to break even. Now, I know I am not one of life's optimists but that seems to be pushing it. Why wouldn't I take the money as a lump sum (again) and pay my own income. Or spend it on drugs sanatogen and fast cars mobility scooters?
If you (need to) transfer it out in order to draw it down only 25% is tax free.
So if you took the whole lot in one lump sum you would presumably get smashed for 40% tax on the 75% that is taxable.
I transferred mine out into a SIPP and as I have no other income am drawing the maximum I can yearly without paying any tax.
So you will be paying tax on every penny of the pension income from elsewhere?0 -
LargeAddick said:bobmunro said:LargeAddick said:Covered End said:Wheresmeticket? said:I've got a pension with my current employer which will be worth around 17k at time of retirement (I took all my pensions from various jobs over the years as lump sums and put them into premium bonds) - their "calculator" seems to imply that I will get an income of £350 PER YEAR(!). Now I wasn't expecting to be zooming off to Costa Rica like some of you are but my calculations are that I would have to live for 48 years after reaching retirement age to break even. Now, I know I am not one of life's optimists but that seems to be pushing it. Why wouldn't I take the money as a lump sum (again) and pay my own income. Or spend it on drugs sanatogen and fast cars mobility scooters?
If you (need to) transfer it out in order to draw it down only 25% is tax free.
So if you took the whole lot in one lump sum you would presumably get smashed for 40% tax on the 75% that is taxable.
I transferred mine out into a SIPP and as I have no other income am drawing the maximum I can yearly without paying any tax.
So you will be paying tax on every penny of the pension income from elsewhere?
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golfaddick said:
As an IFA I am well qualified to advise you on this..............but as cafcfan says, I would need much more info to give you specific advice on this and the FSA would have kittens if I gave ANY sort of advice on a site like this with the minimal info given.
HOWEVER
It it were my pension plan I would prefer to have control over it than to have it still in the hands of an ex-exployer - but then I am an expert. I would say that it is not neccessary to invest into a SIPP, which is just a glorified personal pension with higher charges..........unless you specifically want to invest directly into individual shares or commercial property.
Nowdays many pension providers offer decent run plans with low charges, many of which a reduced once your fund exceeds £30,000 - £50,000. and would look at Scottish Widows, Scottish Life, AXA, and Aviva.
hope this helps
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redman said:AFKABartram said:Scares me how little of this I understand
1. If you are employed make sure you are in the employers pension scheme and make the most of any contributions they pay (some pay a minimum then match what you put in up to a limit etc).
2. Try and establish what you would want per annum once retired and work backwards from there.
Start as early as you can no matter how small the contributions. £250 a month (between you and your employer) from age 21 should see quite easily £600k at 67.0 -
AFKABartram said:3
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golfaddick said:Wheresmeticket? said:Covered End said:Wheresmeticket? said:I've got a pension with my current employer which will be worth around 17k at time of retirement (I took all my pensions from various jobs over the years as lump sums and put them into premium bonds) - their "calculator" seems to imply that I will get an income of £350 PER YEAR(!). Now I wasn't expecting to be zooming off to Costa Rica like some of you are but my calculations are that I would have to live for 48 years after reaching retirement age to break even. Now, I know I am not one of life's optimists but that seems to be pushing it. Why wouldn't I take the money as a lump sum (again) and pay my own income. Or spend it on drugs sanatogen and fast cars mobility scooters?
If you (need to) transfer it out in order to draw it down only 25% is tax free.
So if you took the whole lot in one lump sum you would presumably get smashed for 40% tax on the 75% that is taxable.
I transferred mine out into a SIPP and as I have no other income am drawing the maximum I can yearly without paying any tax.0 -
Rob7Lee said:redman said:AFKABartram said:Scares me how little of this I understand
1. If you are employed make sure you are in the employers pension scheme and make the most of any contributions they pay (some pay a minimum then match what you put in up to a limit etc).
2. Try and establish what you would want per annum once retired and work backwards from there.
Start as early as you can no matter how small the contributions. £250 a month (between you and your employer) from age 21 should see quite easily £600k at 67.0 -
KingKinsella said:golfaddick said:Nug said:I have a personal pension with Standard Life and was looking at it and have it invested in 7 funds of all sorts, US tracker, Far East, FTSE and a couple of Special Situations amongst them. I have a decent understanding of risk but have always thought I don't have the time or expertise to do better than a tracker fund. I've noticed that some of the funds have performed really badly. Should I simplify the allocations into a global tracker or use one of their lifesyle profiles? I'm 54.
Trackers are cheap but they do what they say on the tin - track the index/market/asset they are aligned to.
Ask @PragueAddick how his low cost Vanguard Lifestyle 20 fund did last year.
A simple analogy is to ask what is best -
1) an equity cash pot that when it was worth £10,000 could buy £200 of annuity income and when it was £20,000 could only buy £150 of annuity income or
2) a bond cash pot that guarantees £175 of annuity income regardless of the price of gilts or price of equities.
If you intend to stay invested and drawdown an income, a decent scheme offers a different Lifestyle option that keeps an element of growth assets post retirement.
What is wrong with most LIfetsyle schemes is that they don't have enough invested in growth assets in the early years in the belief that investors fear volatility, even though its the long term value that counts, not this year's value compared to last years.
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Hornchurch said:Rob7Lee said:redman said:AFKABartram said:Scares me how little of this I understand
1. If you are employed make sure you are in the employers pension scheme and make the most of any contributions they pay (some pay a minimum then match what you put in up to a limit etc).
2. Try and establish what you would want per annum once retired and work backwards from there.
Start as early as you can no matter how small the contributions. £250 a month (between you and your employer) from age 21 should see quite easily £600k at 67.
I want to have 16x annual salary, so for ease of numbers say the salary is £100k so I'd want a pot or £1.6m (not necessarily all in a pension pot, but made up of ISA's etc).
I'm assuming my pot will at least keep up with inflation as will remain invested and state pension is circa £10k, so on that basis were I to draw the 56k it's roughly 28 years worth.
Now if drawing at 65 onwards it's highly likely that were I to live 28 years I wouldn't need to be drawing so much out in those later years so should be fine.
That's just a very basic how I roughly calculate. But will depend on when you want to start etc0 -
golfaddick said:Nug said:I have a personal pension with Standard Life and was looking at it and have it invested in 7 funds of all sorts, US tracker, Far East, FTSE and a couple of Special Situations amongst them. I have a decent understanding of risk but have always thought I don't have the time or expertise to do better than a tracker fund. I've noticed that some of the funds have performed really badly. Should I simplify the allocations into a global tracker or use one of their lifesyle profiles? I'm 54.
Trackers are cheap but they do what they say on the tin - track the index/market/asset they are aligned to.
Ask @PragueAddick how his low cost Vanguard Lifestyle 20 fund did last year.
Some very good answers above from some knowledgeable people on pensions. Thanks all.0 -
Meanwhile there are a slew of generally small but welcome increases in interest on various easy access accounts. 3.2% now easily available without opting for some Arab or Nigerian outfit beloved of Raisin. Slightly odd that the one-year fixed rates have stagnated, though.0 -
Rob7Lee said:Hornchurch said:Rob7Lee said:redman said:AFKABartram said:Scares me how little of this I understand
1. If you are employed make sure you are in the employers pension scheme and make the most of any contributions they pay (some pay a minimum then match what you put in up to a limit etc).
2. Try and establish what you would want per annum once retired and work backwards from there.
Start as early as you can no matter how small the contributions. £250 a month (between you and your employer) from age 21 should see quite easily £600k at 67.
I want to have 16x annual salary, so for ease of numbers say the salary is £100k so I'd want a pot or £1.6m (not necessarily all in a pension pot, but made up of ISA's etc).
I'm assuming my pot will at least keep up with inflation as will remain invested and state pension is circa £10k, so on that basis were I to draw the 56k it's roughly 28 years worth.
Now if drawing at 65 onwards it's highly likely that were I to live 28 years I wouldn't need to be drawing so much out in those later years so should be fine.
That's just a very basic how I roughly calculate. But will depend on when you want to start etc
I've been extraordinarily fortunate in that I have been able to accumulate retirement savings from net income so I know that I will pay tax only on investment income as the retirement pot is not in a pension and therefore not taxable (currently!!). Drawings from the pot will be tax free!
Edit: I wouldn't suggest this approach as a norm - if you have a pension scheme where the employer contributes then absolutely use it.0 -
Rob7Lee said:razil said:my main and only concern is that I have enough pension tbh
But with regards your initial 1st question - for me the questions is why would you NOT take the pension with your employer when they are probably putting in 25%+ of your annual salary (plus what you put in receives tax relief). You're likely getting 30% plus of your salary into pension at probably less than 5% cost to you.
It's almost free money!
On the subject of transfers to LGPS, it is likely to be worthwhile only if your old pension was DB and also a public sector scheme, since the transfer "club" rules apply and gives you year for year transferred. Otherwise I think they still quote an added number of years which is not quite the same.
What is guaranteed is that added years will either be poor value or good value, and only by accident be equivalent value. If your future salary increases are more than the scheme actuary's assumed average you are a winner or if increases are lower you are a loser.
It is unfortunately the case that access to the relevant information which allows an informed view on inter scheme transfers involving DB benefits is not available to individuals at anything approaching a reasonable cost. Even then the information based on statistics and probabilities is more like a Peanuts Malloy assessment than pointing to a guaranteed winner.
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Rob7Lee said:Hornchurch said:Rob7Lee said:redman said:AFKABartram said:Scares me how little of this I understand
1. If you are employed make sure you are in the employers pension scheme and make the most of any contributions they pay (some pay a minimum then match what you put in up to a limit etc).
2. Try and establish what you would want per annum once retired and work backwards from there.
Start as early as you can no matter how small the contributions. £250 a month (between you and your employer) from age 21 should see quite easily £600k at 67.
I want to have 16x annual salary, so for ease of numbers say the salary is £100k so I'd want a pot or £1.6m (not necessarily all in a pension pot, but made up of ISA's etc).
I'm assuming my pot will at least keep up with inflation as will remain invested and state pension is circa £10k, so on that basis were I to draw the 56k it's roughly 28 years worth.
Now if drawing at 65 onwards it's highly likely that were I to live 28 years I wouldn't need to be drawing so much out in those later years so should be fine.
That's just a very basic how I roughly calculate. But will depend on when you want to start etc
Not that I am near either0 -
Hornchurch said:Rob7Lee said:Hornchurch said:Rob7Lee said:redman said:AFKABartram said:Scares me how little of this I understand
1. If you are employed make sure you are in the employers pension scheme and make the most of any contributions they pay (some pay a minimum then match what you put in up to a limit etc).
2. Try and establish what you would want per annum once retired and work backwards from there.
Start as early as you can no matter how small the contributions. £250 a month (between you and your employer) from age 21 should see quite easily £600k at 67.
I want to have 16x annual salary, so for ease of numbers say the salary is £100k so I'd want a pot or £1.6m (not necessarily all in a pension pot, but made up of ISA's etc).
I'm assuming my pot will at least keep up with inflation as will remain invested and state pension is circa £10k, so on that basis were I to draw the 56k it's roughly 28 years worth.
Now if drawing at 65 onwards it's highly likely that were I to live 28 years I wouldn't need to be drawing so much out in those later years so should be fine.
That's just a very basic how I roughly calculate. But will depend on when you want to start etc
Not that I am near either
Mine is probably way over the top, but it was just to give an idea, some may be happy on 35% of salary, therefore you'd need a lot less than 16x0