# Pension pots.. how much is too little?



## vkurup (Nov 15, 2013)

Yesterday, Prince Charles hit 65 and should get his free bus pass... also the annual enrolment into the company pension fund starts again.  

We are all living longer.  lets say we will live to 90 i.e. a good 25 years after retiring.  The money in the pot has to support yourself and the Mrs into the grave.  I am assuming the house would be paid off by then, secondary income will be non existing and the kids would have flown.  You still want to go out an play golf and buy the latest TM clubs.  

So how much money should be in the pot when you stop working?


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## chrisd (Nov 15, 2013)

More money will be needed than I've got!


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## MadAdey (Nov 15, 2013)

Really depends on how good you want your life to be when you retire. If everything is paid off then yuo could probably get by on Â£1000 a month in your hand, so that would need about Â£300,000 in the pot if you live to 90. I know people who live off their armed forces pension at my place along with their state pension. So they have probably got around Â£18K a year pension coming in and they happily afford to keep playing golf.


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## Doon frae Troon (Nov 15, 2013)

To live decently you need at least Â£20k a year at today's rates.

I am more than a bit miffed that I am receiving zilch interest on my hard earned savings whilst others are living the life of Riley on 0% mortgage rates. Pensioners were part of the 'hard working families'  that our beloved politicians love to sound bite at every opportunity

Sods have clawed back Â£100 of my winter fuel allowance as well.
Fuel costs go up by 10% and they reduce the fee, that's a vote winner if ever I saw one.

Our household living costs are Â£6.5k a year with everything paid for. That is heating fuel, electric, rates inc water, insurance, car tax + RAC [two cars] phones, Sky TV, TV licence.


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## Shaunmg (Nov 15, 2013)

Big issue with me at the moment. Pension annuities are at an all time low, and the word out there is not to expect much improvement in the future, may get even worse. Low interest rates along with bigger life expectancy are the reasons.


I have a pension pot of about Â£150,000 and want to start drawing it in January, I'm 62. The best quote I've had is Â£8,900 per year , which of course will be taxable. So if you're thinking you need 20k, my guess is you need half a million. So good luck and start saving


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## vkurup (Nov 15, 2013)

Shaunmg said:



			I have a pension pot of about Â£150,000 and want to start drawing it in January, I'm 62. The best quote I've had is *Â£8,900* per year , which of course will be taxable. So if you're thinking you need 20k, my guess is you need half a million. So good luck and start saving
		
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That is tough... You would think that 40 yrs of work now needs to feed about 30 years without it.  Half a mil over 40 yrs is about 12500 per year (on a straight line).  At 6% matching contributions, you need someone to earn 100K per year from their first year of employment!! (Of course this discounts the fact that earning is more exponential rather than linear)


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## Marshy77 (Nov 15, 2013)

Shaunmg said:



			Big issue with me at the moment. Pension annuities are at an all time low, and the word out there is not to expect much improvement in the future, may get even worse. Low interest rates along with bigger life expectancy are the reasons.


I have a pension pot of about Â£150,000 and want to start drawing it in January, I'm 62. The best quote I've had is Â£8,900 per year , which of course will be taxable. So if you're thinking you need 20k, my guess is you need half a million. So good luck and start saving
		
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Suppose it depends on what other income you have. If you only lived on that pension then you wouldn't be taxed as the free pay rate is Â£9440.


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## SwingsitlikeHogan (Nov 15, 2013)

This is something that we have only just started to think about - and much more seriously than in the past.  

Fortunately my first job (of 16yrs) has a final salary scheme that is still healthy; my current employment has a good employer like-for-like contribution (though what is that worth in the end - who knows); and my wife has worked in the NHS all her life and is now in a senior nursing position.  But in truth whilst that sounds and feels OK - we haven't a clue where it actually puts us financially in the context of standard of living when the time arrives and we are both 'retired'.  

So about a month ago, and for the first time ever, we have engaged with a independent financial adviser to help us properly understand our pension position and sort out what we can do now - and over the coming 10-15yrs to make it as good as possible.  From what I can recall I think he mentioned a figure of Â£300k pot for Â£20k/annum pension - but I may be totally wrong in that as the figures were flying.  One thing he was talking about was how there is likely to be a move from buying an annuity to drawing down from the pot - in some way.


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## richart (Nov 15, 2013)

SwingsitlikeHogan said:



			This is something that we have only just started to think about - and much more seriously than in the past.  

Fortunately my first job (of 16yrs) has a final salary scheme that is still healthy; my current employment has a good employer like-for-like contribution (though what is that worth in the end - who knows); and my wife has worked in the NHS all her life and is now in a senior nursing position.  But in truth whilst that sounds and feels OK - we haven't a clue where it actually puts us financially in the context of standard of living when the time arrives and we are both 'retired'.  

So about a month ago, and for the first time ever, we have engaged with a independent financial adviser to help us properly understand our pension position and sort out what we can do now - and over the coming 10-15yrs to make it as good as possible.  From what I can recall I think he mentioned a figure of Â£300k pot for Â£20k/annum pension - but I may be totally wrong in that as the figures were flying.  One thing he was talking about was how there is likely to be a move from buying an annuity to drawing down from the pot - in some way.
		
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I am an Independent Financial Adviser, and current basic annuity rates for a 65 year old male in good health are about 6%. This is liable for tax at your highest rate. You can take 25% tax free cash from your pot, which would normally be recommended unless you have guaranteed annuity rates written into you pension plan. A lot of old style retirement annuity contracts from the 70's and early 80's did, and these plans are like gold dust. Guaranteed rates can be 12/13%. If you have such a contract under no circumstances transfer your plan, as you will lose the guarantees.

Remember if you include escalation, guaranteed payment periods, widows pension etc, the amount you will receive will drop significantly from the 6% figure I quoted. For a husband and wife both aged 65 with a 100% widows pension you may only receive about 4% per annum from your pot. 

Anyone who is thinking of drawing income from their pension pot without purchasing an annuity must get professional advice. Effectively you are taking money out of your pension in the hope that the pot will grow, and or that annuity rates will not fall further. Think of the worst case scenario, your fund falls in value, rates drop further, and your pot could diminish at a very quick rate. Of course the opposite could happen but can you take the risk ?

These are just general points, and as I mentioned always take professional advice, preferably from a pension specialist.


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## SwingsitlikeHogan (Nov 15, 2013)

richart said:



			I am an Independent Financial Adviser, and current basic annuity rates for a 65 year old male in good health are about 6%. This is liable for tax at your highest rate. You can take 25% tax free cash from your pot, which would normally be recommended unless you have guaranteed annuity rates written into you pension plan. A lot of old style retirement annuity contracts from the 70's and early 80's did, and these plans are like gold dust. Guaranteed rates can be 12/13%. If you have such a contract under no circumstances transfer your plan, as you will lose the guarantees.

Remember if you include escalation, guaranteed payment periods, widows pension etc, the amount you will receive will drop significantly from the 6% figure I quoted. For a husband and wife both aged 65 with a 100% widows pension you may only receive about 4% per annum from your pot. 

Anyone who is thinking of drawing income from their pension pot without purchasing an annuity must get professional advice. Effectively you are taking money out of your pension in the hope that the pot will grow, and or that annuity rates will not fall further. Think of the worst case scenario, your fund falls in value, rates drop further, and your pot could diminish at a very quick rate. Of course the opposite could happen but can you take the risk ?

These are just general points, and as I mentioned always take professional advice, preferably from a pension specialist.
		
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Good advice - thank you sir!  The thoughts on alternatives to annuities were at the point of 'retirement' - whatever that will actually mean and whenever that might happen 15yrs or so from now.


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## Hacker Khan (Nov 15, 2013)

SwingsitlikeHogan said:



			But in truth whilst that sounds and feels OK - we haven't a clue where it actually puts us financially in the context of standard of living when the time arrives and we are both 'retired'.
		
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Probably not as good as you thought it would be, but a lot better than the majority of people.  I think it is a bit of a ticking timebomb as a few (but I fully understand its not all by a long stretch of the imagination) of the current pensioners have been lucky enough to get final salary or generous pension pots.  But the current 30 or 40 somethings will not get those, so there will be even more skint people around in 20/30 years time.

And I can only see it getting worse as with the cost of houses, who nowadays has the opportunity to save away a nice pension pot once you've paid off your mortgage, fuel bills, student loans, car loans etc etc.  

It's all well and good saying you will use your house as income, but that is assuming that your house will be worth enough to do that, and that you are willing to significantly downsize when the time comes, which I suspect quite a few won't after getting used to living in a decent house.


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## vkurup (Nov 15, 2013)

Hacker Khan said:



			It's all well and good saying you will use your house as income, but that is assuming that your house will be worth enough to do that, and that you are willing to significantly *downsize* when the time comes, which I suspect quite a few won't after getting used to living in a decent house.
		
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Downsize from this would mean living in a smaller shoebox!!!


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## richart (Nov 15, 2013)

SwingsitlikeHogan said:



			Good advice - thank you sir!  The thoughts on alternatives to annuities were at the point of 'retirement' - whatever that will actually mean and whenever that might happen 15yrs or so from now.
		
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  You should certainly look into an Open Market Option when you decide to take your benefits. i.e getting annuity quotes from all annuity companies and not just the one you have your plan with. No doubt in 15 years time pension rules will have changed, and you will need to take advice at the time on the options available.

Anyone with a money purchase scheme should look at how their fund is invested and does it suit their risk profile. Also if you are in equity funds you need to be careful as you approach retirement, as a sudden fall in stock markets could lead to a fall in your fund value. Someone that retired in 1987 days after the stock market crash saw their fund values drop by as much as 50%, so their pension annuity dropped accordingly. Anyone that had received advice to switch into a cash fund say 6 months earlier would not have suffered the fall. Pensions are a minefield, and it amazes me how little people know about probably their biggest investment.

If you invested longer term Â£100,000 you would spread it between different companies, and different funds. Yet a lot of people will have considerably more than that sum invested in one company and one fund. It pays to take an interest in your pension. I am talking about Money purchase Schemes and not final salary ones, and all my comments are general rather than specific to anyone.


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## mikee247 (Nov 15, 2013)

richart said:



			You should certainly look into an Open Market Option when you decide to take your benefits. i.e getting annuity quotes from all annuity companies and not just the one you have your plan with. No doubt in 15 years time pension rules will have changed, and you will need to take advice at the time on the options available.

Anyone with a money purchase scheme should look at how their fund is invested and does it suit their risk profile. Also if you are in equity funds you need to be careful as you approach retirement, as a sudden fall in stock markets could lead to a fall in your fund value. Someone that retired in 1987 days after the stock market crash saw their fund values drop by as much as 50%, so their pension annuity dropped accordingly. Anyone that had received advice to switch into a cash fund say 6 months earlier would not have suffered the fall. Pensions are a minefield, and it amazes me how little people know about probably their biggest investment.

If you invested longer term Â£100,000 you would spread it between different companies, and different funds. Yet a lot of people will have considerably more than that sum invested in one company and one fund. It pays to take an interest in your pension. I am talking about Money purchase Schemes and not final salary ones, and all my comments are general rather than specific to anyone.
		
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I think you are right a lot of people dont really know what they have invested in what and how many funds etc and those that do don't get as much information on this as they should. I was hoping that there would be a big clean up on the woeful pension set up in this country but alas it hasn't seemed to changed a huge amount.  I have a few pension schemes in place but I'd never take a large risk and put all my retirement funding or guarantee in them. I'm more inclined to spread the risk and invest it in a number of different projects in completely different markets such as property, land, commodities, shares, wine, business investment etc. Its a myth that you have to have a huge amount of money to do this but if you get good advice and invest carefully, there is another way rather than the traditional pension only process which is awful in my opinion nowadays.


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## Hobbit (Nov 15, 2013)

Whatever you think you need for your plans, make sure you plan for the unexpected. In 2006 my various *pots* were ticking along very nicely... and then the was the crash! Â£14k wiped out in a few months AND the rates fell through the floor - a double whammy!!

The plan to retire at 52.5yrs old went out the window. And it is only in the last year that the numbers have showed a glimmer of recovery. However, I'll still be in my 60's, at the current rate before I can consider retiring. 

I have 2 decent Scot's Widows pots, a 10yr NHS pot and 16yrs worth of a decent money savers scheme(15% of salary), all of which don't look like they'll produce anything startling. In other words, if you are looking for a decent pension, save as much as you can and then some.


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## CMAC (Nov 15, 2013)

if I had my time again I would invest in property as a pension. Like Hobbit I lost a lot in the crash of 2006.


@Richart, I dont think its about people not knowing about their biggest investment, it's more about _understanding_ as they are very complicated in their make up and easily confuse.


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## Ian_S (Nov 15, 2013)

A question I've often wondered about. I'm 29, so starting relatively early, but still, when I get my pension statements I have absolutely no idea whether the projected income is good or not. I guess all I can do is put as much into my fund as possible and keep an eye on it. Luckily I'm in a good company for now that puts 13% of my salary into the pot while I put 7% in.

Plus I presume the projections are all based on my salary rising with inflation, where hopefully I can make enough of a success of my work that it grows faster than that.


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## SwingsitlikeHogan (Nov 15, 2013)

Ian_S said:



			A question I've often wondered about. I'm 29, so starting relatively early, but still, when I get my pension statements I have absolutely no idea whether the projected income is good or not. I guess all I can do is put as much into my fund as possible and keep an eye on it. Luckily I'm in a good company for now that puts 13% of my salary into the pot while I put 7% in.

Plus I presume the projections are all based on my salary rising with inflation, where hopefully I can make enough of a success of my work that it grows faster than that.
		
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I don't think 29 is relatively early to start saving into a pension to be honest.  I started straight after starting work at 25 - and other new graduate employees would have started at 21yrs old - my company at the time BAe strongly recommended that all new graduate starters started pension contributions from the word go - and most of us did.


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## harpo_72 (Nov 15, 2013)

Honestly speaking I don't have a pension, the costs and poor performance seem to be a waste of money. I have an ISA, that should be unrestricted regarding tax, you have paid income tax and national insurance .. Why should you be taxed on savings? Secondly when is the financial sector going to be castrated, the saving options are tainted by charges, how can you justify a charge that is greater than the interest? 
Also you cannot play stocks and shares,you have to use a broker or your charged for transactions ... The doors are shut.
it was suggested to us to put x amount in a pension, when I counted yep if I put that directly into my mortgage I will complete it in 5 years, there was no answer. The simple financial solutions are, don't live beyond your means I.e. that flash car is just wasted money as is the latest apple thing or the new lap top etc... Oh and get rid of your biggest financial burden fast... 

I guess my generation is supporting the final salary generation, I also disagree with multi million pound pensions... They aren't needed, divide them up.


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## Liverpoolphil (Nov 15, 2013)

Have a military pension as well as a work pension ( I pay 5% they pay 10% ) so hopefully with the state one added willbe ok for future living


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## SocketRocket (Nov 15, 2013)

harpo_72 said:



			Honestly speaking I don't have a pension, the costs and poor performance seem to be a waste of money. I have an ISA, that should be unrestricted regarding tax, you have paid income tax and national insurance .. Why should you be taxed on savings? Secondly when is the financial sector going to be castrated, the saving options are tainted by charges, how can you justify a charge that is greater than the interest? 
Also you cannot play stocks and shares,you have to use a broker or your charged for transactions ... The doors are shut.
it was suggested to us to put x amount in a pension, when I counted yep if I put that directly into my mortgage I will complete it in 5 years, there was no answer. The simple financial solutions are, don't live beyond your means I.e. that flash car is just wasted money as is the latest apple thing or the new lap top etc... Oh and get rid of your biggest financial burden fast... 

*I guess my generation is supporting the final salary generation*, I also disagree with multi million pound pensions... They aren't needed, divide them up.
		
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Please explain?


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## harpo_72 (Nov 15, 2013)

Well how do you think rates are maintained ? They are maintained by giving lower rates to new investors. Do you honestly think the pittance that was paid in will support you without some outside agent making a contribution ... That outside agent is the next generation. Why are final salary pensions being phased out? Because they cannot be supported.


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## Doon frae Troon (Nov 15, 2013)

I am astonished at how many of my children's generation have made no provision at all for their old age.
Many think that they will inherit their parents homes and all will be tickety boo.
With my generation now living into their 90's they could be in for a shock.

On the other hand, I had a couple of good friends who made good provision for their old age but unfortunately died before they could claim any.


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## harpo_72 (Nov 15, 2013)

The only thing will inherit is a credit card bill and possibly a care bill, due to some really bad economic policy. Seriously we have some massive issues to deal with, and they are all related to greed.


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## richart (Nov 15, 2013)

CMAC said:



			if I had my time again I would invest in property as a pension. Like Hobbit I lost a lot in the crash of 2006.


@Richart, I dont think its about people not knowing about their biggest investment, it's more about _understanding_ as they are very complicated in their make up and easily confuse.
		
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 True, but not understanding your pension, means that you don't know how it works. If you are worried about your pension plan get professional advice.

Personally I would go to an Independent Financial adviser ( I would say that wouldn't I ) A lot of people have potentially large investments which they are not getting any advice on. We can all choose the best Cash ISA, but how many people know the best pension plan to take out, or what funds their existing plans should be invested into, when to switch funds, what are their options at their selected retirement date It can be a minefield, and for anyone that is worried about their pension plan(s) it is better to get early advice rather than leaving it to nearer their retirement date. Advisers can charge on an hourly basis, so they can advise on your existing policies without trying to sell you another pension plan, unless you need one of course.; Try and get a recommendation for an adviser if possible. There are some good ones out there.

One piece of advice I will give is if you leave or have left a Company and had joined their pension scheme, keep in touch with the Trustees of the Scheme. If you move, tell them, as they will not hunt you down. An amazing amount of money is left is pension schemes and not claimed. Also Companies get taken over, scheme names change and it can be difficult to track down pensions, especially if Companies go bust. Also if you are not getting statements on a money purchase scheme you have no idea how your plan is performing.

Hope this helps, but as I said before this is just general advice, and not specific to any particular post


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## PNWokingham (Nov 16, 2013)

Lots of good advice already but key points from me:
1. Start a pension as early as you can - and also use ISAs, share accounts and/or property -eggs and baskets etc - but take advantage of the tax benefits of pensions and ISAs - there is virtually no help in other areas
2. Final salary pensions are dead apart from the lucky few. Never transfer any deferred final salary schemes to a new Money Purchase plan
3. Amalgamate all small money purchase pots (apart from ones with a good guaranteed annuity rate) into a SIPP. Check out SIPPDEAL - zero AMC, low share dealing and big rebates on funds. When we changed our GPP at work from Aviva to Scottish Widows, I transferred my pot here rather than SW. You can invest in virtually every mutual fund on the market plus nearly all equities from UK and abroad - I invest in shares rather than funds and favour ones with good yields. You can also invest in commercial property in a SIP but I have not looked into the options - no point with the size of my pot!
http://www.sippdeal.co.uk/default.aspx
4. With annuity rates so low, I would choose income drawdown options and keep the pot invested for as long as possible and certainly until rates normalise. IMHO, we have probably passed the worst for annuity rates but they may not improve in a hurry - 10y money market rates have already spiked since the summer on the expectation that the Fed would end QE - most expected it to start withdrawal in September, but they didn't - I reckon they will probably start in March and end it by the end of next year, but new Fed governor Yellen is proving more doveish than expected and may surprise if economic data does not improve


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## MadAdey (Nov 16, 2013)

It is an interesting thread seeing as I am 37 and at a point where I should be looking into making sure I can afford to have a good retirement. I am not a financial advisor or some kind of finacial wizkid, but I look at retirement along these lines. First thing first, no matter who you are you are going to have these outgoings a month in the current climate for you and a partner:

Gas, water, Electricity - Â£150
Council Tax                  Â£150
SKY, Broadband, Phone  Â£80
Food                          Â£400
TOTAL                        Â£780

So going on that if I was to retire today I would need Â£780 in my hand to make sure that I had a roof over my head, bills paid and food in my belly. So straight away I need to have Â£9360 in my hand to live comfortably. It then all depends on what you want on top of that. Add some more things for the year:

Golf membership     Â£800
Car insurance        Â£150
Holiday                Â£2000
Golfing expenses    Â£300
Fuel                    Â£1000

So now I am up to Â£13610 a year to live a moderately comfortable life in my retirement. If you round that up to Â£15000 I think I would be in the right ball park for me to retire today if I had no mortgage to pay. If I was 60 and retiring and lived to 85 then I would need Â£375000 in the retirement fund to draw from.


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## Doon frae Troon (Nov 16, 2013)

I retired a couple of years ago. The 4 years prior to that I worked part time/seasonal no brainer jobs which I really enjoyed. So I eased my way in. Many go from hectic jobs to nothing in a day, I would not advise that.
Once retired it is quite surprising how little money you need. Provided of course you bring no debt with you.
Simple things like gardening become more pleasurable as you are not time restricted. We go hill walking at least once a week, keeps you fit and cost's nothing.
You have more time to enjoy cooking and tend to eat much healthier. I also do half a day a week voluntary work.

Planning is the key to a successful retirement. Money is important if you still want the posh holidays and big car.
We both have newish billy basic cars and tend to take half a dozen budget short UK breaks a year.

You need to plan in your happiness as well as your financial future.


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## MadAdey (Nov 16, 2013)

Would be interesting to hear what sort of money you need from someone who is retired.


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## vkurup (Nov 16, 2013)

Some great advice.. esp Ricarht... 

Richart.. i agree with you that you gotta look at where the pension pot is invested at a regular basis.  How would that work if one is in a company defined contribution schemes.  Would somebody like that benefit from going to an IFA?  Most pensions do allow you to choose funds, but I am assuming these are limited options.


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## Doon frae Troon (Nov 16, 2013)

MadAdey said:



			Would be interesting to hear what sort of money you need from someone who is retired.
		
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As I said earlier, with no debt Â£20k by today's values.
Probably Â£15k minimum.


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## SocketRocket (Nov 16, 2013)

harpo_72 said:



			Well how do you think rates are maintained ? They are maintained by giving lower rates to new investors. Do you honestly think the pittance that was paid in will support you without some outside agent making a contribution ... That outside agent is the next generation. Why are final salary pensions being phased out? Because they cannot be supported.
		
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I didn't think anything.  I just asked you to explain.


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## SocketRocket (Nov 16, 2013)

Doon frae Troon said:



			As I said earlier, with no debt Â£20k by today's values.
Probably Â£15k minimum.
		
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Would you consider that suitable for an individual or a couple?


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## Doon frae Troon (Nov 16, 2013)

SocketRocket said:



			Would you consider that suitable for an individual or a couple?
		
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To be honest with no debt there is not a huge difference between single and couple.
As I said earlier our basic household bills [which I would imagine are around average] are nearly Â£6.5k a year. Say Â£5.5 for a single.
I would say that you need about Â£100 a week spending money single [Â£150 couple] for food, petrol, clothes, leisure, hols etc.


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## teetime72 (Nov 16, 2013)

MadAdey said:



			Would be interesting to hear what sort of money you need from someone who is retired.
		
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Difficult one this.IT all depends on what you want in retirement.
DfT reckons Â£15000 min.this is ok IF you`re happy with daytime telly.
If you cannot afford to go out,your home,especialy in winter, can become you`re prison.
You need to get out and going out costs.
A simple thing like two cups of coffee & toasted tea cakes twice a week 
will set you back Â£20 (Â£1000 yr).
Meal out -visit to the cinema-treat the Grand Children-it all costs.
Bear in mind,when you go out to work 5 days a week you`re making money.
When I go out I`m spending money.
So in the main I agree with DfT,but my minimum would be Â£20000
I have been retired now for 10 yrs andI can assure you it doesn`t 
get any cheaper with age.

If I had my time over again I would not retire until I was made to.


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## blackpuddinmonster (Nov 16, 2013)

This is difficult, still having over 20 yrs still to go, but after reading DfTs' and Teetimes' posts i guess i'am not as worried as i was after reading some of the earlier posts.
We both work full time, so will both be entitled to full basic pension, thats Â£11,500pa give or take.
Our single largest bill is the mortgage, which will be paid of by the time i'am 60, thats Â£6,000 based on current payments.
Next comes food. Â£5,000 at the mo:, get rid of the ofspring, Â£3,500 ? So another Â£1500 to the pot.
I have no intention of quiting work completly, so 2 days a week doing what i'am doing now is Â£6000pa after tax.
So we are already up to Â£25,000. 
We both have private pensions also, mine a bog standard work based contributary jobby, my wifes a decent nhs one. So when you add these to the pot i guess we're sitting pretty. We're also very lucky.
Lucky that both are in good health.
Lucky enough to both be working.
Lucky enough to own our own home.
I just hope are luck holds out for another 20yrs.


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## MadAdey (Nov 16, 2013)

teetime72 said:



			A simple thing like two cups of coffee & toasted tea cakes twice a week 
will set you back Â£20 (Â£1000 pa).
		
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Where the hell are you getting your groceries from? Tea cakes where Â£1 fir a pack of 4 last time I looked.


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## Hobbit (Nov 16, 2013)

MadAdey said:



			Where the hell are you getting your groceries from? Tea cakes where Â£1 fir a pack of 4 last time I looked.
		
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I think, in the context of the post, he means the cost of going out twice a week for these. He won't be far short


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## MadAdey (Nov 16, 2013)

Hobbit said:



			I think, in the context of the post, he means the cost of going out twice a week for these. He won't be far short
		
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Reading it back, I think that is what tee time is saying, sorry buddy aye I should slow down on the red wine.......


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## Doon frae Troon (Nov 16, 2013)

tea time,

It tends to work both ways.
At work there is always extra spending such as lunches, leaving do's etc.

Â£15k min. would not leave much for holidays etc but loads of things are free and their is plenty to do.
Groups such as Opportunities in Retirement [not sure if they have them in England] offer courses and groups in many areas, photography, rambling, family history, antiques, sports, debating to name a few.
Quite a few of the oldies in my village work part time or volunteer for the Nat. Trust at Culzean Castle, Turnberry, The Burns Centre etc.
Always loads of options for getting oot the hoose for fun or making money.


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## Doon frae Troon (Nov 16, 2013)

blackpuddinmonster said:



			This is difficult, still having over 20 yrs still to go, but after reading DfTs' and Teetimes' posts i guess i'am not as worried as i was after reading some of the earlier posts.
We both work full time, so will both be entitled to full basic pension, thats Â£11,500pa give or take.
Our single largest bill is the mortgage, which will be paid of by the time i'am 60, thats Â£6,000 based on current payments.
Next comes food. Â£5,000 at the mo:, get rid of the ofspring, Â£3,500 ? So another Â£1500 to the pot.
I have no intention of quiting work completly, so 2 days a week doing what i'am doing now is Â£6000pa after tax.
So we are already up to Â£25,000. 
We both have private pensions also, mine a bog standard work based contributary jobby, my wifes a decent nhs one. So when you add these to the pot i guess we're sitting pretty. We're also very lucky.
Lucky that both are in good health.
Lucky enough to both be working.
Lucky enough to own our own home.
I just hope are luck holds out for another 20yrs.

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BPM bear in mind that if you have an opted out works pension you will not also get a full state pension.

I just scraped in for a full state pension as I started work at 15 and worked P/t for 4 years after my f/t job. Even then I had to buy an extra couple of years. I had 20 years opted out so was a bit fortunate.


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## MadAdey (Nov 16, 2013)

Reading this post I do think that you could live on Â£15K and still lead a reasonable lifestyle as I set out earlier. But I think you just need to put away as much as possible and cross your fingers that it gives you the life you want in retirement.


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## blackpuddinmonster (Nov 16, 2013)

Doon frae Troon said:



			BPM bear in mind that if you have an opted out works pension you will not also get a full state pension.

I just scraped in for a full state pension as I started work at 15 and worked P/t for 4 years after my f/t job. Even then I had to buy an extra couple of years. I had 20 years opted out so was a bit fortunate.
		
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You've got me worried again. 
Is this where your ni contributions are paid into a private scheme instead of the state pot?
I remember being asked this, and declined the offer.
Don't no if it was the right choice financially, but i guess it means i'am ok as far as the state pension goes.
I believe you can check how many qualifying years you have paid in. Thats a job for Monday. 
Thanks for the heads up. :thup:


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## williamalex1 (Nov 16, 2013)

The number of years contributions required to qualify for full pension, change around a few years ago.
 Now if you have paid NI contributions for I think 35 years  ? you qualify for full retirement state pension  .
 Being contracted out to other types of graduated or private pensions will change the amount of state pension you receive. And maybe put you over income limit for claiming other benefits.


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## Doon frae Troon (Nov 16, 2013)

Anyone over 45 should check their qualifying years, it is dead easy just go on the website.

It has got very messy recently my wife was one of the first batch of women to be able to claim the child caring years, that made a huge difference to her pension of an extra 14 years. Her cousin born a year earlier does not get those years.

My wife had to wait till she was nearly 62 [from 60] but now I think the qualifying age is up to 64.


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## SocketRocket (Nov 16, 2013)

blackpuddinmonster said:



			You've got me worried again. 
Is this where your ni contributions are paid into a private scheme instead of the state pot?
I remember being asked this, and declined the offer.
Don't no if it was the right choice financially, but i guess it means i'am ok as far as the state pension goes.
I believe you can check how many qualifying years you have paid in. Thats a job for Monday. 
Thanks for the heads up. :thup:
		
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Opting out does not affect your basic state pension, it only affects the additional state pension that adds to it.


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## blackpuddinmonster (Nov 17, 2013)

williamalex1 said:



			The number of years contributions required to qualify for full pension, change around a few years ago.
 Now if you have paid NI contributions for I think 35 years  ? you qualify for full retirement state pension  .
 Being contracted out to other types of graduated or private pensions will change the amount of state pension you receive. And maybe put you over income limit for claiming other benefits.
		
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I see what your saying, but my understanding is if we have both got 35 yrs in we are both entitled to Â£110 each. Working on the principle that we won't be entitled to any other benefits, after all the other bills have been paid, power, rates, etc, we should still be left with spending money of about 10-13 grand, more if i work like i hope to.
Like Doon says, i think the knack is to not take any debts into retirement.


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## blackpuddinmonster (Nov 17, 2013)

SocketRocket said:



			Opting out does not affect your basic state pension, it only affects the additional state pension that adds to it.
		
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Is that what used to be called SERPS?
As Richart says i really must start taking more interest in this stuff.
I think some reading is required.


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## SocketRocket (Nov 17, 2013)

blackpuddinmonster said:



			Is that what used to be called SERPS?
As Richart says i really must start taking more interest in this stuff.
I think some reading is required. 

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Yes, thats right, it was the SERPS part of your NI contributions,  to receive a full State pension you need to now have 30 years of class 1 NI contributions.  They will also allow a number of NI qualifying years for a Woman if she was not working and looking after the children while claiming family allowance.


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## Doon frae Troon (Nov 17, 2013)

I think you can still buy additional years on your State pension to make up the 30 years.
If my memory serves it is around Â£800 per year. Well worth doing [unless you pop your clogs before 70]


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## Hobbit (Nov 17, 2013)

MadAdey said:



			Reading this post I do think that you could live on Â£15K and still lead a reasonable lifestyle as I set out earlier. But I think you just need to put away as much as possible and cross your fingers that it gives you the life you want in retirement.
		
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Full State pension is Â£110.15/week = just under Â£5.8k. Many people look at that and see it as just under Â£12k for husband and wife. Great when you're both alive but which ever one out lives the other suddenly finds they're back down to half that. 

'Our' pension pots aren't too bad but another important aspect is making sure the right annuity is chosen so that the surviving spouse still has a decent income.


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## beau d. (Nov 17, 2013)

richart said:



			I am an Independent Financial Adviser, and current basic annuity rates for a 65 year old male in good health are about 6%. This is liable for tax at your highest rate. You can take 25% tax free cash from your pot, which would normally be recommended unless you have guaranteed annuity rates written into you pension plan. A lot of old style retirement annuity contracts from the 70's and early 80's did, and these plans are like gold dust. Guaranteed rates can be 12/13%. If you have such a contract under no circumstances transfer your plan, as you will lose the guarantee

Remember if you include escalation, guaranteed payment periods, widows pension etc, the amount you will receive will drop significantly from the 6% figure I quoted. For a husband and wife both aged 65 with a 100% widows pension you may only receive about 4% per annum from your pot. 

Anyone who is thinking of drawing income from their pension pot without purchasing an annuity must get professional advice. Effectively you are taking money out of your pension in the hope that the pot will grow, and or that annuity rates will not fall further. Think of the worst case scenario, your fund falls in value, rates drop further, and your pot could diminish at a very quick rate. Of course the opposite could happen but can you take the risk ?

These are just general points, and as I mentioned always take professional advice, preferably from a pension specialist.
		
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An excellent "out of bounds" topic, and thanks to Richart for his input. My wife and I intend to retire in 4 years at 56 and 57 repectively. My wife has a teachers pension but to supplement years missed she has a stakeholder which she has paid the maximum into now for many years. I find it interesting that Richart reccomends taking a 25% tax free lump sum, is that just because you pay no tax on that ammount or are there other factors?
I also find it quite interesting the suggestion of saving for a pension in an ISA, I presume this to be a cash ISA, taking that into account it isn't going to make much of a pension pot after 30/40 years considering at present you are looking at best 2% interest on a maximum anual ammount of Â£5760. I feel nowadays if you want to end up with a decent pot to retire on some risk (i.e investing in equity) is essential up until the latter years with annuity rates being so low.
Richart do you see any potential increase on the horizon in annuity rates?


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## blackpuddinmonster (Nov 17, 2013)

Hobbit said:



			Full State pension is Â£110.15/week = just under Â£5.8k. Many people look at that and see it as just under Â£12k for husband and wife. Great when you're both alive but which ever one out lives the other suddenly finds they're back down to half that. 

'Our' pension pots aren't too bad but another important aspect is making sure the right annuity is chosen so that the surviving spouse still has a decent income.
		
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Good point Hobbit.
Being simple folk are plans are for our private pots to be good enough to cover our living expenses, leaving the state pot as spending money.
With 20yrs still to go, is there any way to find out if we are on track?


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## blackpuddinmonster (Nov 17, 2013)

SocketRocket said:



			Yes, thats right, it was the SERPS part of your NI contributions,  to receive a full State pension you need to now have 30 years of class 1 NI contributions.  They will also allow a number of NI qualifying years for a Woman if she was not working and looking after the children while claiming family allowance.
		
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After doing a quick bit of reading this morning, its now going to be 35 yrs, and i can't retire untill i'am at least 67.
The good news is that from 2017 the whole system is going to be made simpler, something called The Single-tier pension. The good, good news is that with 35 yrs in we will both get Â£144 in todays money.


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## SocketRocket (Nov 17, 2013)

blackpuddinmonster said:



			After doing a quick bit of reading this morning, its now going to be 35 yrs, and i can't retire untill i'am at least 67.
The good news is that from 2017 the whole system is going to be made simpler, something called The Single-tier pension. The good, good news is that with 35 yrs in we will both get Â£144 in todays money. 

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I had to accrue a minimum 44 years NI for my state pension, it was reduced a few years ago to 30.     The future increase in the pension will be good news for new pensioners but some will lose out as they are removing the additional state pension payments.  Existing pensioners will not get this new level either thus creating a two tier state pension.  We will have a situation where two people reaching pension age a month apart and having paid the same level of NI contributions, one will get around Â£40 a week more than the other.


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## blackpuddinmonster (Nov 17, 2013)

SocketRocket said:



			I had to accrue a minimum 44 years NI for my state pension, it was reduced a few years ago to 30.     The future increase in the pension will be good news for new pensioners but some will lose out as they are removing the additional state pension payments.  Existing pensioners will not get this new level either thus creating a two tier state pension.  We will have a situation where two people reaching pension age a month apart and having paid the same level of NI contributions, one will get around Â£40 a week more than the other.
		
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That is bad news Socket. So your pension does not rise in 2017? That stinks a bit to be honest. :angry:
As you say, two sides to each story, nothing changes. Plus seeing as i can't retire until 2033 everything is bound to have changed again by then.


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## Doon frae Troon (Nov 17, 2013)

Single tier pension....is that the one where a guy who has never worked in his life will get the same pension as someone who has worked all their life?


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## blackpuddinmonster (Nov 17, 2013)

Doon frae Troon said:



			Single tier pension....is that the one where a guy who has never worked in his life will get the same pension as someone who has worked all their life?
		
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Not from what i've been reading Doon.
Less than 10 yrs contributions, no pension.
10 to 35 yrs pro rata, so 30 yrs = 30/35s' or Â£123.


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## SocketRocket (Nov 17, 2013)

Doon frae Troon said:



			Single tier pension....is that the one where a guy who has never worked in his life will get the same pension as someone who has worked all their life?
		
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No, its not like that.  I think you still have to pay 30 years full NI contributions for a full pension which will be around Â£140 a week baseed on todays values.   If you pay in less NI then you will recieve a reduced pension just like at present.  If you are already recieving a state pension before the date it is implemented then you will not get the enhanced amount.


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## Doon frae Troon (Nov 17, 2013)

I think that will mean lots of very poor people in 2044.
A good incentive to get a job.


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## drawboy (Nov 17, 2013)

We are all doing it wrong! What you need to do is leave school at 16, sign on. Do absolutely nothing..apart from a bit of porridge here and there, under no circumstances contribute anything to anyone then claim a full state pension until you die and get buried on the state too. Then see how much your pension pot or annuity drops, chances are not very much. Anyone who does anything differently is merely paying into the ones mentioned before who will be lapping it up for 60+ years or more.


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## Doon frae Troon (Nov 17, 2013)

I always remember when I was 35 I had done 20 years of work.
A neighbours daughter had qualified as a teacher and done a BSc by her 25th birthday without doing a days work.

Drawboy..........you have not been paying attention.


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## SwingsitlikeHogan (Nov 17, 2013)

...and however much my projected pension is - state pension plus projected personal pension - I must not forget that it is taxed.  So to have Â£20k a year spending power I must have an annual pension of say Â£23k (assuming Â£13k of taxable pension income).


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## richart (Nov 17, 2013)

vkurup said:



			Some great advice.. esp Ricarht... 

Richart.. i agree with you that you gotta look at where the pension pot is invested at a regular basis.  How would that work if one is in a company defined contribution schemes.  Would somebody like that benefit from going to an IFA?  Most pensions do allow you to choose funds, but I am assuming these are limited options.
		
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 If you are in a final salary scheme, you are very lucky ! These schemes are like gold dust, and whatever you do don't transfer out ! Most are now closed to new employees, and even existing employees are having their terms changed. Companies are struggling to afford them, and would much prefer to run a Money Purchase Scheme.

Money Purchase Schemes are where your contributions are made into your own pension plan, and you invest your contributions according to the risk you wish to take, and the funds you are offered Your final pension will depend on how much is contributed, how your funds perform, and annuity rates at the time you purchase an annuity. Bearing in mind the amount of money that is held within these type of pension plans, you need to get the right funds that suit your risk and the term you are investing for. Pensions are complicated and it may be worth getting a professional to look over any plan you are not sure about. Don't wait until you are just about to retire, as if there is a problem it will be too late to sort out !! I can only give very general advice, and nothing specific. I would also mention that I do not take on new clients, so I am not looking for business, just advising you all not to ignore your pension until you retire.



beau d. said:



			An excellent "out of bounds" topic, and thanks to Richart for his input. My wife and I intend to retire in 4 years at 56 and 57 repectively. My wife has a teachers pension but to supplement years missed she has a stakeholder which she has paid the maximum into now for many years. I find it interesting that Richart reccomends taking a 25% tax free lump sum, is that just because you pay no tax on that ammount or are there other factors?
I also find it quite interesting the suggestion of saving for a pension in an ISA, I presume this to be a cash ISA, taking that into account it isn't going to make much of a pension pot after 30/40 years considering at present you are looking at best 2% interest on a maximum anual ammount of Â£5760. I feel nowadays if you want to end up with a decent pot to retire on some risk (i.e investing in equity) is essential up until the latter years with annuity rates being so low.
Richart do you see any potential increase on the horizon in annuity rates?
		
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 Personally think that annuity rates are bottoming out, so short term could fall slightly but medium term may increase but not necessarily by much. There are a lot of reasons why rates have dropped so much, including actuaries simply miscalculating how long we will all live. Also a point that a lot of people don't realise is that there are now impaired life annuities. This means if you have had a stroke, heart attack, cancer etc, you will almost certainly qualify for a much higher annuity rate. Actuaries calculate that your life expectancy is lower. Interesting to note that a healthy male aged 65 is likely to live to nearly 90 on average, and for a women it is higher still.

Before impaired life annuities were introduced, everyone bought their annuity on the same terms. Those that died early basically were funding those that lived to a ripe old age. Now that all the 'unhealthy' people are taken out of the equation for rate calculations, we are left with healthy people looking to purchase an annuity, with the likelihood that they will live to 90 odd. Annuity rates then fell accordingly. Good news for those that are in poor health, but not for the healthy majority.

Re tax free cash. If you have a guaranteed annuity rate written into your plan and you want income then you may be best advised not to take the tax free cash. If you do not have a such a plan, and are just buying your annuity on the open market, you may be prudent to take the tax free cash. You could invest the sum for income, but still retain the capital, and even at a later date buy a purchase life annuity if you so wish. You are keeping your options open. Remember once you have purchased an annuity you can not change your mind. Everyone is different so these comments are very general, and you should seek advice. The good news is you do not have to make any decisions now, only at retirement.


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## SocketRocket (Nov 17, 2013)

Doon frae Troon said:



			I think that will mean lots of very poor people in 2044.
A good incentive to get a job.
		
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It's not as bad as it sounds. People can get something like pension Credits that top up their income if its below a certain weekly amount.


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## MegaSteve (Nov 18, 2013)

As someone on the cusp of retirement I've found this thread has given one or two things to think about before I take the step...

One thing that is important in later life is your health and sadly not something you can 'save' for...


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## Rooter (Nov 19, 2013)

I am 35 years old next year and not really given all this a second thought. I have 2 pensions from 2 employers past that have a fairly decent sum in each, but currently i am not paying into any pension pots. I don't know what to do, I have started to think that just filling up ISA's would be better. i really should go and see an IFA me thinks...


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## SwingsitlikeHogan (Nov 19, 2013)

Whilst we are on this - just a refresher question for me from those who know - as I ask this question to of my own advisor then forget.

Where my final salary deferred benefits tell me that my total deferred pension is say Â£5K a year - is that in todays spending power?  So assuming inflation etc will the actual amount be - say - Â£7.5K a year - that amount being equivalent to Â£5K today.

Similarly where my 'money purchase' plan says 'at the age of 65 your yearly pension could be 5K' is that the same as above.

If yes, then if I add these together at the moment I have plans amounting to spending power of Â£10k a year in today's money.  That make sense?  To which I'd add the state joint pension of about Â£12k (basic - must check if contracted out - I did at one point but may hacve contracted back in - I can't remember).  So my total pension exc. wife's would be Â£22k per annum?


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## duncan mackie (Nov 19, 2013)

SwingsitlikeHogan said:



			Where my final salary deferred benefits tell me that my total deferred pension is say Â£5K a year - is that in todays spending power?  So assuming inflation etc will the actual amount be - say - Â£7.5K a year - that amount being equivalent to Â£5K today.

Similarly where my 'money purchase' plan says 'at the age of 65 your yearly pension could be 5K' is that the same as above.
		
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normally/generically etc

the FS pension will be including an assumption regarding inflation, and increases in deferment, to provide such a figure.

the MP one will be projecting a growth assumption and guessing  (on similar assumptions) an annuity rate available at the time to come up with the possible pension available at that future date.

so no, you can't look at them in the same way as you seem to have done above. you can consider the FS one in todays terms plus an element of inflation proofing but not the MP one. All and any efforts to put MP projections into todays terms (since first introduction with money purchase contracting out in the late 1980's) have, IMO, simply managed to confuse the hell out of anyone bar the actuaries.

if you want some good news, some people don't realise that you don't (currently) pay NI on approved pensions - the bad news is that when on a pension, if you get part time work you can have one hell of a marginal tax rate on relatively low earnings!


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## G.U.R (Nov 19, 2013)

A really good thread with some good points made and raised. I have been paying into various pensions since I was 18. Our works final salary pension was frozen some years ago because of the points raise above I transferred my previous pension pot into it before it was frozen so I get a statement saying the works one will pay me X and my transferred one will pay me Y. I was also miss sold a Plan so have Â£2K or so just sat with Abbey Life which i'm not sure what to do with. I am now paying into a Standard Life Pension where the company match my contributions into it...have gone for the average risk funds as I know very little about these things and am working on the basis that the retirement age will be about 70 when I get there so have 24 odd years to go yet. Don't know what this will bring me on retirement but I can't say I haven't tried to put something behind me.


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## SocketRocket (Nov 19, 2013)

duncan mackie said:



			normally/generically etc

the FS pension will be including an assumption regarding inflation, and increases in deferment, to provide such a figure.

the MP one will be projecting a growth assumption and guessing  (on similar assumptions) an annuity rate available at the time to come up with the possible pension available at that future date.

so no, you can't look at them in the same way as you seem to have done above. you can consider the FS one in todays terms plus an element of inflation proofing but not the MP one. All and any efforts to put MP projections into todays terms (since first introduction with money purchase contracting out in the late 1980's) have, IMO, simply managed to confuse the hell out of anyone bar the actuaries.

if you want some good news, some people don't realise that you don't (currently) pay NI on approved pensions - the bad news is that when on a pension, if you get part time work you can have one hell of a marginal tax rate on relatively low earnings!
		
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When on a state retirement pension you no longer have to pay NI on your earnings.   You do pay tax though and if this takes you into the higher rate including your pension then your pension gets cut proportional to your higher earnings.


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## SwingsitlikeHogan (Nov 19, 2013)

duncan mackie said:



			the MP one will be projecting a growth assumption and guessing  (on similar assumptions) an annuity rate available at the time to come up with the possible pension available at that future date.
		
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Thanks for that Duncan.  I understand that there is nothing guaranteed about the MP - whilst the FS one is much more predictable (assuming it continues as it is going today).  

But with the MP scheme there is still surely something indicative about the amount they give.  So what I think they are *not * saying is that (given their fund growth assumptions etc) you might get something of the order of Â£5K a year when you retire at 65.  Clearly were that to be the case then in today's money the amount would be 'worth' a good bit less in buying power due to inflation.  IN fact if we had very high inflation that Â£5K might actually be worth diddly squat when I retire.

I'm thinking by way of helping in my understanding of this of the couple of Â£5 premium bonds my folks bought me back in the 1960s.  Worth Â£5 in the '60s - worth Â£5 today - but buying power VERY different back then compared with today.


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## duncan mackie (Nov 19, 2013)

SwingsitlikeHogan said:



			But with the MP scheme there is still surely something indicative about the amount they give.  So what I think they are *not * saying is that (given their fund growth assumptions etc) you might get something of the order of Â£5K a year when you retire at 65.
		
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any illustration will state the basis for the projection; they certainly won't 'project' the possible pension in today's terms alone, but my last understanding was that they had generally moved to inflation adjusted acrual rates. 

don't know what basis you have your current figures but the industry was looking at them (again) and I think we are in yet another interim phase!  for point of sale material the intermediate accumulation rate was 7% which was nett 4.5% after a 2.5% inflation, and the FRC, consulting with the FSA and industry providers, was heading for 5% / nett 2.5% (upper and lower rates can also be used) last time I discussed it.

all of which I why I suggested you should assume you could look at the MP figures in the same way as the FS ones - but I can't be definitive on exactly what you are looking at, and therefore how you can make them comparable!


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## duncan mackie (Nov 19, 2013)

SocketRocket said:



			When on a state retirement pension you no longer have to pay NI on your earnings.   

You do pay tax though and if this takes you into the higher rate including your pension then your pension gets cut proportional to your higher earnings.
		
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you don't pay NI on approved scheme pensions even when you aren't on a state retirement pension, but once you reach state retiremement age ie do get your state pension, you don't pay NI on any earnings, as you say.

I don't understand your comment re "...then your pension gets cut proportional to your higher earnings." Te Pension Service (who pay the state pensions) advise HMRC (who collect tax) of your state pension and they will collect any tax (basic or higher rate) through your PAYE tax code - so effectively you will see the total tax deducted from your other earnings (whether pension or earned income).


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## SocketRocket (Nov 19, 2013)

duncan mackie said:



			you don't pay NI on approved scheme pensions even when you aren't on a state retirement pension, but once you reach state retiremement age ie do get your state pension, you don't pay NI on any earnings, as you say.

I don't understand your comment re "...then your pension gets cut proportional to your higher earnings." Te Pension Service (who pay the state pensions) advise HMRC (who collect tax) of your state pension and they will collect any tax (basic or higher rate) through your PAYE tax code - so effectively you will see the total tax deducted from your other earnings (whether pension or earned income).
		
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I admit my previous comment was a bit vague there.  Your Personal Allowance reduces by Â£1 for every Â£2 of income above Â£100,000. If your income is very high, your Personal Allowance can reduce to zero.


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## Liverbirdie (Nov 19, 2013)

Is it only me who is waiting for Richart's next post to be " My father is the interior minister in (insert failed state) and he is trying to extract Â£30 million pounds and just needs your............

Only joking - well done for taking time out to give general advice.

My conundrum is whether to pay an extra Â£100 into my pension from next year, or overpay Â£100 a month on the mortgage. I've seen some of the projected figures for overpayments, and I would love to pay it off by 55 (I'm 43 now) and I've been paying the mortgage for 6 years.

Then I could pay the extra Â£ 6-900 mortgage payments into pensions for the remaining 10 years before hopefully retiring at 65, if not earlier.


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## Doon frae Troon (Nov 19, 2013)

Liverbirdie said:



			Is it only me who is waiting for Richart's next post to be " My father is the interior minister in (insert failed state) and he is trying to extract Â£30 million pounds and just needs your............

Only joking - well done for taking time out to give general advice.

My conundrum is whether to pay an extra Â£100 into my pension from next year, or overpay Â£100 a month on the mortgage. I've seen some of the projected figures for overpayments, and I would love to pay it off by 55 (I'm 43 now) and I've been paying the mortgage for 6 years.

Then I could pay the extra Â£ 6-900 mortgage payments into pensions for the remaining 10 years before hopefully retiring at 65, if not earlier.
		
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I would say pension every time......especially with 0% interest rates...[but I aint too smart]
I think I have been lucky rather than clever.


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## G1BB0 (Nov 19, 2013)

I never thought about pensions or retirement for years. Since hitting 40 its definitely something I am more aware of. I have a small army pension (7 years service), will have 'hopefully' 30yrs BT pension by the time I retire + I am in a sharesave which I plan to withdraw each year (will have 3x 3yr plans & 3x 5 year plans running at all times) & put into isa's etc or possibly hold in shares aslong as they are going upwards lol.

Hopefully once the kids are all at work in 4 or 5 years time I can increase my monthly pension payments even if its only by a couple of % will at least put a few extra sheckles in the bank each month. No doubt I will retire, get the lump sums and drink myself to death within 6 months


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## Doon frae Troon (Nov 19, 2013)

G1BB0 said:



			Hopefully once the kids are all at work in 4 or 5 years time I can increase my monthly pension payments even if its only by a couple of % will at least put a few extra sheckles in the bank each month. No doubt I will retire, get the lump sums and drink myself to death within 6 months 

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Don't forget the Uni fees, cars, weddings, and help with the mortgage deposits.


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## vkurup (Nov 19, 2013)

This post seems to have taken a life of its own.... Happy to start it considering the heat I got for starting the debate about the impact of inconsistent length of Orange tees and how to tie a shoe lace (both topics continue to be as important as pensions)

PS:  At the next forum meet, i am expecting Richart to put up a stall and provide independent advice.  Please book now..


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## williamalex1 (Nov 20, 2013)

vkurup said:



			This post seems to have taken a life of its own.... Happy to start it considering the heat I got for starting the debate about the impact of inconsistent length of Orange tees and how to tie a shoe lace (both topics continue to be as important as pensions)

PS:  At the next forum meet, i am expecting Richart to put up a stall and provide independent advice.  Please book now..
		
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Better have a stall for G-Mulligan too.


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## SwingsitlikeHogan (Nov 20, 2013)

Doon frae Troon said:



			Don't forget the Uni fees, cars, weddings, and help with the mortgage deposits.
		
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Mine both at Uni at moment, and with us being part of the squeezed middle, they only qualify for the minimum loan and we get no help for anything from government - so they are costing us a small fortune at the moment.  Our assumption is that that small fortune will continue to flow their way for quite some time after they graduate.  Might as well make that assumption since it is most likely that's what we'll have to do.

Would be nice to think that once they graduate more money would become available to invest for retirement - but it ain't going to happen.


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## duncan mackie (Nov 20, 2013)

SwingsitlikeHogan said:



			Mine both at Uni at moment, and with us being part of the squeezed middle, they only qualify for the minimum loan and we get no help for anything from government - so they are costing us a small fortune at the moment.  Our assumption is that that small fortune will continue to flow their way for quite some time after they graduate.  Might as well make that assumption since it is most likely that's what we'll have to do.

Would be nice to think that once they graduate more money would become available to invest for retirement - but it ain't going to happen.
		
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spare a small thought for those who had to deal with that when only on a pension, and still have 3 living at home........


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## Hobbit (Nov 20, 2013)

SwingsitlikeHogan said:



			Mine both at Uni at moment, and with us being part of the squeezed middle, they only qualify for the minimum loan and we get no help for anything from government - so they are costing us a small fortune at the moment.  Our assumption is that that small fortune will continue to flow their way for quite some time after they graduate.  Might as well make that assumption since it is most likely that's what we'll have to do.

Would be nice to think that once they graduate more money would become available to invest for retirement - but it ain't going to happen.
		
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"Both mine".... try putting 5 through uni


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## SwingsitlikeHogan (Nov 20, 2013)

Hobbit said:



			"Both mine".... try putting 5 through uni
		
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Aye well - you should have thought of that when you were having fun   Clearly lack of advance planning - you should have moved to Scotland


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## SwingsitlikeHogan (Nov 20, 2013)

duncan mackie said:



			spare a small thought for those who had to deal with that when only on a pension, and still have 3 living at home........

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oh gowd - that said maybe they arrange for you to get a cup of tea and a rich tea biscuit in bed every morning.


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## Doon frae Troon (Nov 20, 2013)

duncan mackie said:



			spare a small thought for those who had to deal with that when only on a pension, and still have 3 living at home........

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Free care for the elderly up here as well as no Uni charges
Half price golf
Half price housing
Decent health care system
Get your passport and pension in order and get up here quickly, while you still can.


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## SwingsitlikeHogan (Nov 20, 2013)

Doon frae Troon said:



			Get your passport and pension in order and get up here quickly, while you still can.
		
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But don't expect a vote...maybe - when is the cut-off for eligibility btw?


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## williamalex1 (Nov 20, 2013)

Doon frae Troon said:



			Free care for the elderly up here as well as no Uni charges
Half price golf
Half price housing
Decent health care system
Get your passport and pension in order and get up here quickly, while you still can.
		
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Plus a good football team


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## Deleted member 18588 (Nov 20, 2013)

Doon frae Troon said:



			Free care for the elderly up here as well as no Uni charges
Half price golf
Half price housing
Decent health care system
Get your passport and pension in order and get up here quickly, while you still can.
		
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As long as the English taxpayer keeps subsidising it. Better hope Alex doesn't win.


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## SocketRocket (Nov 20, 2013)

MetalMickie said:



			As long as the English taxpayer keeps subsidising it. Better hope Alex doesn't win.
		
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:whoo:


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## mikee247 (Nov 20, 2013)

MadAdey said:



			Reading this post I do think that you could live on Â£15K and still lead a reasonable lifestyle as I set out earlier. But I think you just need to put away as much as possible and cross your fingers that it gives you the life you want in retirement.
		
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Great thread this interesting to hear how everyone approaches this... The one thing I have got from the outlaws who have been retired for 15 years plus and in fact the wife mentioned it is that what ever you spend or repay a year now to maintain a standard of living now is probably what you want to have available at least when you retire....why would you spend less??? Minus of course and hopefully the debts such as mortgages etc.  So in essence if your expenditure now is Â£50k a year which includes a 10k mortgage... you're going to need at least Â£40k a year to maintain it plus a bit for additional golf visits etc   I cant possibly imagine living on Â£15k when I retire unfortunately so I best get on with it pdq!


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## Doon frae Troon (Nov 20, 2013)

MetalMickie said:



			As long as the English taxpayer keeps subsidising it. Better hope Alex doesn't win.
		
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I wondered who would be the first misguided soul.


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## 19thagain (Nov 20, 2013)

MetalMickie said:



			As long as the English taxpayer keeps subsidising it. Better hope Alex doesn't win.
		
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Mickie you are so correct!

Up here we are so subsidised by the English - whinging Jocks etc - I wonder why the NO camp is so well backed up by Cameron and Co when they have the opportunity to ditch us?

Just let us get on with our big mistake because as we all know ... Scots are unable to think for themselves and need the English Oxbridge chaps to show us how it is done.

Poor things up here, we will have the begging bowl out to the world in the first month on our own.


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## SocketRocket (Nov 20, 2013)

Doon frae Troon said:



			I wondered who would be the first misguided soul.
		
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I think that may have been you


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## Doon frae Troon (Nov 21, 2013)

The Welsh are desperate to keep us in the UK as well.  I wonder why that is if we are such a drain on the UK finances?


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## Deleted member 18588 (Nov 21, 2013)

Doon frae Troon said:



			The Welsh are desperate to keep us in the UK as well.  I wonder why that is if we are such a drain on the UK finances?
		
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In the case of the Welsh it is to distract us from the fact that they are also favoured by the Barnet formula and would rather that the English don't notice.


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## SocketRocket (Nov 21, 2013)

Doon frae Troon said:



			The Welsh are desperate to keep us in the UK as well.  I wonder why that is if we are such a drain on the UK finances?
		
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The Welsh are desperate?   Where did you get that information?


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## Doon frae Troon (Nov 21, 2013)

BBC text


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## Deleted member 18588 (Nov 21, 2013)

Doon frae Troon said:



			BBC text
		
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Oh well it must be right then, after all Auntie Beeb never gets anything wrong does it!


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## Doon frae Troon (Nov 21, 2013)

MetalMickie said:



			Oh well it must be right then, after all Auntie Beeb never gets anything wrong does it!
		
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Not usually
Their spelling has been a bit off lately though [says the guy who put an H into Crystal.]


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## Val (Nov 21, 2013)

As you get older you'll spend less, debts are all paid and your salary increases kids will be gone which in turn will lead to monthly savings increasing. People also have the opportunity if they have pension shortfalls of securing hard cash from equity of their paid off homes.

It's all subjectives anyway but I reckon personally Â£100k max in the pension pot will cover me. I'll be extremely greatfull if I live beyond 70.


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## SwingsitlikeHogan (Nov 22, 2013)

We are a bit short of cash at the moment with both kids at uni etc - and a huge monthly mortgage payment.  But I have what seems to be a reasonable pension fund - so extending repayment period for mortgage by 5 yrs (to my age 70 ) knocks Â£500 a month off my mortgage payment.  A good thing that aspect of it - and as soon as we can we will revert to original repayment term.  This will of course mean that when I revert I would have a *higher *monthly payment than before  - not good.  

But here's where I could take advantage of my existing pension plans.  Instead of reverting to repayment by age 65 I could increase term to say me being 67 (and so my payment will be close to what it originally was) - knowing that at 65 (when I 'retire') I have a pension fund from which I could draw down 25% and pay off mortgage loan outstanding.


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## SwingsitlikeHogan (Nov 22, 2013)

btw - point of doing the above is 'use' my pension pot without *actually *using it, as a means to release pressure on my finances today by reducing mortgage payments.  Doing it this way rather than by drawing down on pension pot today (which I could do) to pay off some of our mortgage and hence reduce the monthly payments - this would work but would have a significant impact further down the line.


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## SocketRocket (Nov 23, 2013)

Doon frae Troon said:



			Not usually
Their spelling has been a bit off lately though [says the guy who put an H into Crystal.]
		
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No, they have a reputation for being impartial.   Not.


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