FSAVC - Pension Matures - options
Discussion
Chums
the time has come that my FSAVC will pay out and as ever I'm confronted with several options some of which are excluded to me until I take financial advice!
Firstly we're not talking a 'big pot' but it's over the £30k threshold (just) requiring me to instruct a finnacial adviser, and it has a GAR.
I'm already in receipt of a very good pension so an 'additional' income of £155 gross per month for the rest of life (given it is not index linked) has limited appeal. Taking the max tax free lump sum (leaving £116 gross/month) makes sense to me given it would take c20yrs to accrue it through the monthly income extra if I didn't take it. I'm not confident of living another active 20yrs plus (despite good health) plus when/if I get the state pension in 12yrs that's more income to come.
GAR protects my payments for 5yrs but thereafter if I snuff it all is lost so its got me thinking. I like the idea of taking larger amounts every quarter/6 monthly but cannot with the 'standard' option. A fixed term annuity does not appear an option and I'm left with transfering the pot to a 'Retirement Account' which looks to be stock market invested in a 'cautious' fund. It would however let me take a min £500pm from it (subject to tax) as and when but presumably the fund is classed as my estate whilst the money is there? I'm already exposed to market funds so fluctuation doesn't necessarily bother me and buying in now given Brexit might not be a bad option.
Is this last option popular amongst those taking small free standing pensions and can someone advise the pitfalls or if I'm missing anything?
the time has come that my FSAVC will pay out and as ever I'm confronted with several options some of which are excluded to me until I take financial advice!
Firstly we're not talking a 'big pot' but it's over the £30k threshold (just) requiring me to instruct a finnacial adviser, and it has a GAR.
I'm already in receipt of a very good pension so an 'additional' income of £155 gross per month for the rest of life (given it is not index linked) has limited appeal. Taking the max tax free lump sum (leaving £116 gross/month) makes sense to me given it would take c20yrs to accrue it through the monthly income extra if I didn't take it. I'm not confident of living another active 20yrs plus (despite good health) plus when/if I get the state pension in 12yrs that's more income to come.
GAR protects my payments for 5yrs but thereafter if I snuff it all is lost so its got me thinking. I like the idea of taking larger amounts every quarter/6 monthly but cannot with the 'standard' option. A fixed term annuity does not appear an option and I'm left with transfering the pot to a 'Retirement Account' which looks to be stock market invested in a 'cautious' fund. It would however let me take a min £500pm from it (subject to tax) as and when but presumably the fund is classed as my estate whilst the money is there? I'm already exposed to market funds so fluctuation doesn't necessarily bother me and buying in now given Brexit might not be a bad option.
Is this last option popular amongst those taking small free standing pensions and can someone advise the pitfalls or if I'm missing anything?
When I had a finanical review over 12 months ago I mentioned this FSAVC and the advice was if you don't need it leave it where it is and treat it as either paid up or keep paying in. That said the idea of a tax free bung now is appealing and whilst I've got the GAR it is only for 5yrs where presumably the remainder is written off when I snuff it at the +5yr point?
Whilst I could get some 'protection' by getting an annuity that give spouse cover, index linking etc. this defrays the monthly return making it about enough for a tank of petrol or some beer money.
If we were talking an additional 'income' of £250pm that would be a different ball-game, but tax paid I'm looking more like £80pm fixed for life. The issue of being forced to pay for financial 'advice' on how to decide an option given the amount doesn't sit right being as it's just over the £30k mandatory advice limit.
Whilst I could get some 'protection' by getting an annuity that give spouse cover, index linking etc. this defrays the monthly return making it about enough for a tank of petrol or some beer money.
If we were talking an additional 'income' of £250pm that would be a different ball-game, but tax paid I'm looking more like £80pm fixed for life. The issue of being forced to pay for financial 'advice' on how to decide an option given the amount doesn't sit right being as it's just over the £30k mandatory advice limit.
Those options above I don't need advice apparantly. However if I want to move the money into the company's own 'Retirement Fund' relying on cautious stock investments, value can rise/fall etc. allowing cash (taxed) access whenever I like I need to seek financial advice. This to me seems the better option as I'm not locked into an annuity which writes off the pot in lieu of a monthly pension.
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