Some pension questions.
Discussion
So. I AM still working at 58. I and my current employer are jointly putting about £24k a year in a defined contribution scheme. Total currently is a bit over £70k
I have other DC pots from previous employment ranging from £5k to £45k. And a SIPP which i dont put into but which has risen due to careful gambling from 45k three years ago to £80k (it was always seen as the high risk element of pension)
Total value of those pots is about £200k
Plus a DB scheme worth £5k a year from 65, or £85k transfer value currently.
There is also a BTL of which his 50% is worth £90k or £4500 a year in profit.
There are 2 questions.
If I take the 25% tax free element out of the various pots now, will that limit how much I can put into my current employer scheme?
If I did take it, I would select one pot at a time to crystallise and invest up to the ISA limit each year to reinvest.
The Crystalised part i would combine those into the SIPP to simplify things. But I'd need to adopt a less gunghoe strategy.
How does an IFA work out if transferring the DB money is a good idea? On the face of it, I'm sure i could make £5k out of £85k without reducing the capital, but it would come with risks.
So answers on a postcard to: Mr Wants T. O. Retire
c/o 2 much to do too little time avenue
The north
I have other DC pots from previous employment ranging from £5k to £45k. And a SIPP which i dont put into but which has risen due to careful gambling from 45k three years ago to £80k (it was always seen as the high risk element of pension)
Total value of those pots is about £200k
Plus a DB scheme worth £5k a year from 65, or £85k transfer value currently.
There is also a BTL of which his 50% is worth £90k or £4500 a year in profit.
There are 2 questions.
If I take the 25% tax free element out of the various pots now, will that limit how much I can put into my current employer scheme?
If I did take it, I would select one pot at a time to crystallise and invest up to the ISA limit each year to reinvest.
The Crystalised part i would combine those into the SIPP to simplify things. But I'd need to adopt a less gunghoe strategy.
How does an IFA work out if transferring the DB money is a good idea? On the face of it, I'm sure i could make £5k out of £85k without reducing the capital, but it would come with risks.
So answers on a postcard to: Mr Wants T. O. Retire
c/o 2 much to do too little time avenue
The north
Taking the 25% tax free doesn't trigger the £10K MPAA, so wouldn't limit how much you can pay into a pension.
What's the goal with the tax free lump sums into ISAs?
The £5K from 85K thing. That's surely the point of a DB? You accept getting potentially less money than if investments do well for the certainty over how much you'll get, rather like an annuity.
What's the goal with the tax free lump sums into ISAs?
The £5K from 85K thing. That's surely the point of a DB? You accept getting potentially less money than if investments do well for the certainty over how much you'll get, rather like an annuity.
How does an IFA work out if transferring the DB money is a good idea? On the face of it, I'm sure i could make £5k out of £85k without reducing the capital, but it would come with risks.
My reply to this part would be it may be difficult to find such a FA to agree to even look at doing this these days given their costs of compliance and indeed Insurance ,even on pots of this size.
CETV "rates " are also currently low in view of the gilt yields.
You have been given a multiple of 17 -I transferred my DB pot back in the middle of 2020 and the multiplier then was nearly 41 as a comparison.
My reply to this part would be it may be difficult to find such a FA to agree to even look at doing this these days given their costs of compliance and indeed Insurance ,even on pots of this size.
CETV "rates " are also currently low in view of the gilt yields.
You have been given a multiple of 17 -I transferred my DB pot back in the middle of 2020 and the multiplier then was nearly 41 as a comparison.
alscar said:
How does an IFA work out if transferring the DB money is a good idea? On the face of it, I'm sure i could make £5k out of £85k without reducing the capital, but it would come with risks.
My reply to this part would be it may be difficult to find such a FA to agree to even look at doing this these days given their costs of compliance and indeed Insurance ,even on pots of this size.
CETV "rates " are also currently low in view of the gilt yields.
You have been given a multiple of 17 -I transferred my DB pot back in the middle of 2020 and the multiplier then was nearly 41 as a comparison.
I thought it seemed very low. My reply to this part would be it may be difficult to find such a FA to agree to even look at doing this these days given their costs of compliance and indeed Insurance ,even on pots of this size.
CETV "rates " are also currently low in view of the gilt yields.
You have been given a multiple of 17 -I transferred my DB pot back in the middle of 2020 and the multiplier then was nearly 41 as a comparison.
Pit Pony said:
alscar said:
How does an IFA work out if transferring the DB money is a good idea? On the face of it, I'm sure i could make £5k out of £85k without reducing the capital, but it would come with risks.
My reply to this part would be it may be difficult to find such a FA to agree to even look at doing this these days given their costs of compliance and indeed Insurance ,even on pots of this size.
CETV "rates " are also currently low in view of the gilt yields.
You have been given a multiple of 17 -I transferred my DB pot back in the middle of 2020 and the multiplier then was nearly 41 as a comparison.
I thought it seemed very low. My reply to this part would be it may be difficult to find such a FA to agree to even look at doing this these days given their costs of compliance and indeed Insurance ,even on pots of this size.
CETV "rates " are also currently low in view of the gilt yields.
You have been given a multiple of 17 -I transferred my DB pot back in the middle of 2020 and the multiplier then was nearly 41 as a comparison.
alscar said:
<edited for brevity>
My reply to this part would be it may be difficult to find such a FA to agree to even look at doing this these days given their costs of compliance and indeed Insurance ,even on pots of this size.
CETV "rates " are also currently low in view of the gilt yields.
You have been given a multiple of 17 -I transferred my DB pot back in the middle of 2020 and the multiplier then was nearly 41 as a comparison.
Regarding the part in bold: my wife has a similar DB pension from a previous employer (i,e. circa £5k per annum, index linked) and was quoted a CETV of £200k or so in 2021. I tried in vain to find a IFA who would advise and none of them were remotely interested. One suggested that if the CETV was closer to a £ million then perhaps, but at our end of the market, no chance. No one would touch it. After a while I gave up and she'll get the DB. My reply to this part would be it may be difficult to find such a FA to agree to even look at doing this these days given their costs of compliance and indeed Insurance ,even on pots of this size.
CETV "rates " are also currently low in view of the gilt yields.
You have been given a multiple of 17 -I transferred my DB pot back in the middle of 2020 and the multiplier then was nearly 41 as a comparison.
alscar said:
From talking with ex colleagues recently , I had heard quoted current multipliers of 20 to 25 so yes 17 is the "lowest " I have seen.
Isn't DB transfer multiplier a function of long gilt yields, which are currently pretty high (hence low multiplier), as per https://x.com/EdConwaySky/status/19577631569959486... ?xeny said:
alscar said:
From talking with ex colleagues recently , I had heard quoted current multipliers of 20 to 25 so yes 17 is the "lowest " I have seen.
Isn't DB transfer multiplier a function of long gilt yields, which are currently pretty high (hence low multiplier), as per https://x.com/EdConwaySky/status/19577631569959486... ?I was simply going on what I had read or they had said or what my FA may have said recently.
Whether this equates to "long " or otherwise I know not but I think we are saying the same thing anyway ?
Either way though I wouldn't be transferring or indeed wouldn't have transferred at that low a multiplier.
xeny said:
Taking the 25% tax free doesn't trigger the £10K MPAA, so wouldn't limit how much you can pay into a pension.
What's the goal with the tax free lump sums into ISAs?
The £5K from 85K thing. That's surely the point of a DB? You accept getting potentially less money than if investments do well for the certainty over how much you'll get, rather like an annuity.
What triggers the £10 MPAA ? What's the goal with the tax free lump sums into ISAs?
The £5K from 85K thing. That's surely the point of a DB? You accept getting potentially less money than if investments do well for the certainty over how much you'll get, rather like an annuity.
The idea of taking 25% out of pension. Well I would expect a similar return, so its more about utilising the ISA limits now as I we don't make use of them, because I am deliberately doing long term savings via salary sacrifice AVCs which saves 40% income tax and whatever NI is. But thinking about it, its not important unless the rules on tax free amounts changes.
Pit Pony said:
xeny said:
Taking the 25% tax free doesn't trigger the £10K MPAA, so wouldn't limit how much you can pay into a pension.
What's the goal with the tax free lump sums into ISAs?
The £5K from 85K thing. That's surely the point of a DB? You accept getting potentially less money than if investments do well for the certainty over how much you'll get, rather like an annuity.
What triggers the £10 MPAA ? What's the goal with the tax free lump sums into ISAs?
The £5K from 85K thing. That's surely the point of a DB? You accept getting potentially less money than if investments do well for the certainty over how much you'll get, rather like an annuity.
The idea of taking 25% out of pension. Well I would expect a similar return, so its more about utilising the ISA limits now as I we don't make use of them, because I am deliberately doing long term savings via salary sacrifice AVCs which saves 40% income tax and whatever NI is. But thinking about it, its not important unless the rules on tax free amounts changes.
For £5k annual worth to translate to £85k nowadays sounds about right. I've just gone the opposite direction and converted £100k SIPP to £6k annuity with 100% guarantee to OH. If I had just gone with a single policy then it would have paid out £7k annuity.
Ry.Clarke said:
You have a bunch of good advice already, but I would add this: you shouldn’t be touching any of it. Unless you have significant funds elsewhere, you’re quite behind and need to keep shovelling it in for a bit in my opinion.
Well. My wife has some other savings which would be used for big ticket items and travel and my wife has a final salary NHS pension she paid into from 1985 to 1994.And a DC pot of about £40k from the time i employed her to do admin when I was working freelance.
I have tried to plan without taking into account money in her name. She hasn't worked in 5 years.
We have tracked our expenditure for the last 12 months and spend approx £3 k a month on life and getting to work.
At 67, with state pension, the buy to let and our DB schemes we will have a surplus every month.
Unless one of us dies. (Or divorces the other).
My big spreadsheet suggests that I could retire at 61.
There is a big spanner in the works. My wife currently is waiting to find out, what the NHS are going to do about tye 2 Neuroendocrine Tumours in her small intestine. A cancer research article suggests a 75% survival rate over 5 years. If I could retire now...I obviously would.
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