Pension Advice PPF
Discussion
Hi all i'm not very good with this kind of thing but after some help before I seek professional advice if needed.
Some years ago the PPF took over my Pension and I no longer pay into it. I do have another Pension with my current employer.
I'm 55 and looking at the website my maximum lumpsum may only increase by another 10k if I wait until i'm 65 with the annual payments dropping a few k.
I dont need the cash now but looking into it appears that if I die my wife may only recieve reduced contributions and no lump sum is that correct ?
If thats the case would it be wiser to take it now and stick the lump sum into Premium Bonds or something ?
Cheers !
Some years ago the PPF took over my Pension and I no longer pay into it. I do have another Pension with my current employer.
I'm 55 and looking at the website my maximum lumpsum may only increase by another 10k if I wait until i'm 65 with the annual payments dropping a few k.
I dont need the cash now but looking into it appears that if I die my wife may only recieve reduced contributions and no lump sum is that correct ?
If thats the case would it be wiser to take it now and stick the lump sum into Premium Bonds or something ?
Cheers !
Maybe worth some free info from here
https://www.moneyhelper.org.uk/en/pensions-and-ret...
But I think if you do trigger your pension it will then limit the tax free contributions to your current employer pension. They did increase recently but I believe there is a £10k limit
https://www.moneyhelper.org.uk/en/pensions-and-ret...
But I think if you do trigger your pension it will then limit the tax free contributions to your current employer pension. They did increase recently but I believe there is a £10k limit
scot_aln said:
Maybe worth some free info from here
https://www.moneyhelper.org.uk/en/pensions-and-ret...
But I think if you do trigger your pension it will then limit the tax free contributions to your current employer pension. They did increase recently but I believe there is a £10k limit
Ahh right it does sound more complicated https://www.moneyhelper.org.uk/en/pensions-and-ret...
But I think if you do trigger your pension it will then limit the tax free contributions to your current employer pension. They did increase recently but I believe there is a £10k limit
I’ll get some advice.Cheers !
Narcisus said:
Ahh right it does sound more complicated I’ll get some advice.
Cheers !
Internet advice is murky at best. You don't trigger a reduction in your annual allowance for contributions when drawing a defined benefit pension. I’ll get some advice.Cheers !
Do you need the lump sum? Long term, it's usually better value to take the full annual pension. You need to understand how the pension is being revalued, how it escalates in payment and what the reduction is for taking it early. Then you can do some projections to work out when it might crossover. Initially, you'll be better off taking it early but after a while the higher figure starting later usually overtakes it.
If it's in the PPF then for Pre 97 benefits they're level in payment, CPI capped at 2.5% for Post 97.
steve_n said:
Internet advice is murky at best. You don't trigger a reduction in your annual allowance for contributions when drawing a defined benefit pension.
Do you need the lump sum? Long term, it's usually better value to take the full annual pension. You need to understand how the pension is being revalued, how it escalates in payment and what the reduction is for taking it early. Then you can do some projections to work out when it might crossover. Initially, you'll be better off taking it early but after a while the higher figure starting later usually overtakes it.
If it's in the PPF then for Pre 97 benefits they're level in payment, CPI capped at 2.5% for Post 97.
Do you need the lump sum? Long term, it's usually better value to take the full annual pension. You need to understand how the pension is being revalued, how it escalates in payment and what the reduction is for taking it early. Then you can do some projections to work out when it might crossover. Initially, you'll be better off taking it early but after a while the higher figure starting later usually overtakes it.
If it's in the PPF then for Pre 97 benefits they're level in payment, CPI capped at 2.5% for Post 97.
Thanks Steve no intention of touching the current live pension I was just worried about the Mrs losing out on the PPF lump sum if anything were to happen to me.
https://www.ppfmembers.org.uk/en/FAQs/FAQBereaveme...
The above page on the PPF's site is helpful.
It seems that if you die before you've retired, your spouse would receive half of the pension you would have received if your Normal Pension Age was your date of death. So basically they'll revalue your pension from date of leaving up to date of death and your spouse receives half of that, with no lump sum.
If you die after retirement, they receive half of the pension you were receiving. If you retire and take a lump sum, your pension will be lower, so your spouse will get half of a lower amount. Your pension will also have been actuarially reduced if you've taken early retirement in order to take the lump sum sooner.
In short, it's swings and roundabouts and since you never know when you're actually going to die, it's very hard to make an informed assessment.
The above page on the PPF's site is helpful.
It seems that if you die before you've retired, your spouse would receive half of the pension you would have received if your Normal Pension Age was your date of death. So basically they'll revalue your pension from date of leaving up to date of death and your spouse receives half of that, with no lump sum.
If you die after retirement, they receive half of the pension you were receiving. If you retire and take a lump sum, your pension will be lower, so your spouse will get half of a lower amount. Your pension will also have been actuarially reduced if you've taken early retirement in order to take the lump sum sooner.
In short, it's swings and roundabouts and since you never know when you're actually going to die, it's very hard to make an informed assessment.
Narcisus said:
Thanks Steve no intention of touching the current live pension I was just worried about the Mrs losing out on the PPF lump sum if anything were to happen to me.
You can't draw the lump sum without triggering the annual pension too. Yes, if you die there's no option for your Mrs to get a lump sum. There's short term life cover if you're worried about dying before drawing it.More often than not, the spouse's pension is still based on the full pension before any tax free cash commutation. More internet 'advice'...
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