Pensions? Increasing payments?

Pensions? Increasing payments?

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red_slr

Original Poster:

17,122 posts

188 months

Friday 17th October 2014
quotequote all
I know its a difficult question...

What are peoples thoughts on this?

We are at that point where the payments need to start ramping up - and I just don't know what to do for the best for the future.
My issue is, if I put the money into "cash" savings - no matter what happens to me that money will remain.

If I die soon after retirement, then its gone. Ok, my wife would get the widows payment - but that's only 50% IIRC, and if she was then to die early too its just gone.

If I put the money into my own savings then its always there - and I can draw on it when I feel like.
The other issue is my pension will be taxed - where as with savings its only interest.
And lastly, once we are gone we can leave that money to who ever we want rather than it just going into the pot.

Do I have the right end of the stick here?

I have always increased my pension payments each year - but this year I am tempted to put that increase to one side.
I would still keep my current payment as is - because I know I have to plan for the "what ifs" but I am starting to think a 50/50 approach may be better?

Or is there something I am missing?

??

:/

red_slr

Original Poster:

17,122 posts

188 months

Sunday 19th October 2014
quotequote all
Any thoughts....

Ginge R

4,761 posts

218 months

Sunday 19th October 2014
quotequote all
RS,

Is your pension a defined benefit one then?

Even before the recent changes, your thinking was a little bit behind the drag curve.. I am musing a blog for the week after next, based on a Gallup poll in the States recently which suggested that 10% of baby boomers felt they could never retire. One of the underlying characteristics of them was that their genuine savings never kept pace with earnings, time or inflation.

Some of course, just don't want to stop working. The number that was going to work in some capacity beyond 66 was something like 39%. The answer you need is possibly too involved to deliver here. If you have an inclination to see someone from the bank, an adviser, the guy who administrates your occupational pension, why not make an appointment? smile

http://www.gallup.com/poll/166952/baby-boomers-rel...

red_slr

Original Poster:

17,122 posts

188 months

Sunday 19th October 2014
quotequote all
Its a private pension.
I have an appointment in 2 weeks to see my IFA (who also manages my pension). Kind of wanted some info before then so I can ask the right questions. I cant say my confidence levels are high - because in the past we have made investments with him which have turned out to be not very good to say the least.

The only thing I lose out on by not increasing is the extra TR on the pension - but do the other benefits outweigh the TR?

Ginge R

4,761 posts

218 months

Sunday 19th October 2014
quotequote all
Red,

If it's a personal one, then it goes across entirely (100%) if it hasn't been touched; the idea of dropping 50% or losing it entirely is one of myth from days when we went to work in sepia Morris Marinas. The whole picture has changed and you're seeing your IFA at a great time. I suggest you get in touch with your IFA before you meet to ask for a suggested agenda and suggest something on the lines of this;

".. my understanding is that the pension landscape has changed beyond all recognition since this year's budget so I'd appreciate an update of the options available to me in the event of my death occurring before and after aged 75, and the suitability of increasing my pension contributions compared to investing in other vehicles or even, maximising my wife's personal allowance(s).".

Ginge R

4,761 posts

218 months

Sunday 19th October 2014
quotequote all
red_slr said:
The only thing I lose out on by not increasing is the extra TR on the pension - but do the other benefits outweigh the TR?
Just picked up on this too. There is no one size fits all answer - so many people overlook a partner's annual allowance. Everyone has a different exit or accumulation/deccumulation strategy, so it's impossible to say, with any certainty, whether or not you'd benefit in respect of tax relief. Ask your IFA too, to discuss the revised small/stranded/trivial pension pot legislation for your wife if she has no existing retirement savings.

red_slr

Original Poster:

17,122 posts

188 months

Sunday 19th October 2014
quotequote all
Ok thanks for all that info.

Yes my wife has the exact same pension as me - only difference being mine has a bit more in it due to an old pension I had from an old job which I tx'd over.

Thanks for the advice.

rotarymazda

538 posts

164 months

Monday 20th October 2014
quotequote all
red_slr said:
If I die soon after retirement, then its gone.
Only if you bought an annuity. The latest pension changes mean that you can leave your fund under you control then pull it out at your marginal rate.