Please explain this pension offer
Discussion
I worked for Honeywell for 2.5 years in 2000 and recently remembered I had a FS pension with them the details of which are below.
It gives 3 options of which 2 looks like a lump and cash every year after retirement but is that now or at 65?
Also why don’t I have a quote to take it all out? Is that option 3 but no transfer value?
I don’t want to keep this I’d rather spend the cash on having some fun.
It gives 3 options of which 2 looks like a lump and cash every year after retirement but is that now or at 65?
Also why don’t I have a quote to take it all out? Is that option 3 but no transfer value?
I don’t want to keep this I’d rather spend the cash on having some fun.
DSLiverpool said:
I worked for Honeywell for 2.5 years in 2000 and recently remembered I had a FS pension with them the details of which are below.
It gives 3 options of which 2 looks like a lump and cash every year after retirement but is that now or at 65?
Also why don’t I have a quote to take it all out? Is that option 3 but no transfer value?
I don’t want to keep this I’d rather spend the cash on having some fun.
It looks like they have quoted based on early retirement in July this year, rather than waiting for your normal retirement age, with the annual amount being roughly halved as a result.It gives 3 options of which 2 looks like a lump and cash every year after retirement but is that now or at 65?
Also why don’t I have a quote to take it all out? Is that option 3 but no transfer value?
I don’t want to keep this I’d rather spend the cash on having some fun.
Option 3 is to transfer out, but needs an extra quote to get the number.
I am not a pension expert, but if the early retirement factor is 0.53, and the income is ~£2,200, presumably the future full retirement income at normal retirement age is about £4,400 per annum currently, implying a transfer value of well over £100k. That seems a lot for only 2.5 years work, though, so is surprising.
I’d ask them for that number, personally, plus retirement quotes assuming a normal retirement date.
DSLiverpool said:
I have asked for the crucial transfer out the figure which will take several months (!) to calculate. For 2.4 years service, it looks like it will pay in excess of £50k as a conservative indication she said. Blow me down I wish I had stayed there for another year!
I got 29x retirement income when I transferred out of an old DB scheme last year, with 10 years to go before a normal retirement date.If they are talking an upper five figure amount, you will need to check that the £2,162.67 is before the early retirement factor of 0.53, otherwise it could be a terrible deal!
Mind you, because it is over £30k value, you will legally have to get professionally advised anyway, so they will watch your back.
loafer123 said:
I got 29x retirement income when I transferred out of an old DB scheme last year, with 10 years to go before a normal retirement date.
If they are talking an upper five figure amount, you will need to check that the £2,162.67 is before the early retirement factor of 0.53, otherwise it could be a terrible deal!
Mind you, because it is over £30k value, you will legally have to get professionally advised anyway, so they will watch your back.
Cheers thats great info.If they are talking an upper five figure amount, you will need to check that the £2,162.67 is before the early retirement factor of 0.53, otherwise it could be a terrible deal!
Mind you, because it is over £30k value, you will legally have to get professionally advised anyway, so they will watch your back.
Not sure if you are aware but remember that the pension quoted includes a 50% spouse pension for life.
Another thing to take into account is how the pension increases each year. For example if it increases at 3% pa the pension in 25 years time will double. Buying a pension on the open market that increases in line with CPI costs a fortune.
I’d keep it where it is if I was you. Whatever you are able to transfer out, only 25% will be tax free. Obviously there are circumstances where a transfer/income drawdown is the better option but tread very carefully if you have limited sources of income later in life.
Another thing to take into account is how the pension increases each year. For example if it increases at 3% pa the pension in 25 years time will double. Buying a pension on the open market that increases in line with CPI costs a fortune.
I’d keep it where it is if I was you. Whatever you are able to transfer out, only 25% will be tax free. Obviously there are circumstances where a transfer/income drawdown is the better option but tread very carefully if you have limited sources of income later in life.
Edited by pattyg on Monday 24th June 20:31
pattyg said:
Not sure if you are aware but remember that the pension quoted includes a 50% spouse pension for life.
Another thing to take into account is how the pension increases each year. For example if it increases at 3% pa the pension in 25 years time will double. Buying a pension on the open market that increases in line with CPI costs a fortune.
I’d keep it where it is if I was you. Whatever you are able to transfer out, only 25% will be tax free. Obviously there are circumstances where a transfer/income drawdown is the better option but tread very carefully if you have limited sources of income later in life.
Cheers, I do appreciate that but the wife’s sorted and . I’d rather have the cash now as the males in our family seldom reach 60 (I’m 55).Another thing to take into account is how the pension increases each year. For example if it increases at 3% pa the pension in 25 years time will double. Buying a pension on the open market that increases in line with CPI costs a fortune.
I’d keep it where it is if I was you. Whatever you are able to transfer out, only 25% will be tax free. Obviously there are circumstances where a transfer/income drawdown is the better option but tread very carefully if you have limited sources of income later in life.
Edited by pattyg on Monday 24th June 20:31
With 3 years to go, before an old DB schemes pension starting age of 60, the transfer value is 40x the annual pension..
So 400k for 5 years of contributions 1995-2000..
Sounds a lot, but even if I could transfer it, there is a fair chance that any gambles on stock market would fail!
Quite nice to have a regular, inflation proof pension, from 60 to 100
So 400k for 5 years of contributions 1995-2000..
Sounds a lot, but even if I could transfer it, there is a fair chance that any gambles on stock market would fail!
Quite nice to have a regular, inflation proof pension, from 60 to 100
DSLiverpool said:
Cheers, I do appreciate that but the wife’s sorted and I’d rather have the cash now as the males in our family seldom reach 60 (I’m 55).
I don’t need to know any detail, but I read that genetics is not the key to keeping going on into your 80s: lifestyle choices (diet, exercise, smoking) play a far greater part.....so perhaps you could devote some energy to that?I have a friend who (many years ago!) told me males in his family rarely lived beyond their 40s (as he puffed on a smoking habit!!). Here he is, now into his 50s
If there are specific medical things you are concerned about, perhaps speak with your doctor to see if there are ways they could be mitigated.
Good luck!
mikeiow said:
I don’t need to know any detail, but I read that genetics is not the key to keeping going on into your 80s: lifestyle choices (diet, exercise, smoking) play a far greater part.....so perhaps you could devote some energy to that?
I have a friend who (many years ago!) told me males in his family rarely lived beyond their 40s (as he puffed on a smoking habit!!). Here he is, now into his 50s
If there are specific medical things you are concerned about, perhaps speak with your doctor to see if there are ways they could be mitigated.
Good luck!
Capt Blackadder - "Baldrick - why are you writing your name on that bullet?"I have a friend who (many years ago!) told me males in his family rarely lived beyond their 40s (as he puffed on a smoking habit!!). Here he is, now into his 50s
If there are specific medical things you are concerned about, perhaps speak with your doctor to see if there are ways they could be mitigated.
Good luck!
DSLiverpool said:
Quick update, 2 years and £5k of contributions with Honeywell in 2000 are worth £73k today.
Score! That's the magic of increasing longevity and low interest rates 
When I see numbers like that it gives me a little more sympathy for companies struggling with DB pension deficits.
NickCQ said:
DSLiverpool said:
Quick update, 2 years and £5k of contributions with Honeywell in 2000 are worth £73k today.
Score! That's the magic of increasing longevity and low interest rates When I see numbers like that it gives me a little more sympathy for companies struggling with DB pension deficits.
DSLiverpool said:
Quick update, 2 years and £5k of contributions with Honeywell in 2000 are worth £73k today.
My IFA doesn’t release DB pensions so I have an unknown one from unbiased on the case.
No indication of price yet but is 3% ballpark?
Excellent news.My IFA doesn’t release DB pensions so I have an unknown one from unbiased on the case.
No indication of price yet but is 3% ballpark?
I would follow the George Best strategy.
Blow most of it on coke and hookers and waste the rest...
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