Ok so in 2 years you will be 61, so 6 years short of state pension age. (Currently £11500 pa but will be around £12500 when you hit 67)
Thanks Phil, thats great and lots to ponder .Think the best I can hope for is going part time . My mum & dad are still alive , they will be 91&93 this year so I’ve got good genes but bad joints which might impact my decisions . Great thread this , some great adviceOk so in 2 years you will be 61, so 6 years short of state pension age. (Currently £11500 pa but will be around £12500 when you hit 67)
Basically with your prudential pension you have 4 choices. Not in any order
1 Drawdown, this is where you withdraw sums from your pension at your own discretion. Your funds remain invested and you would aim to withdraw 5% pa (£7200) this should keep the capital amount around the same figure.
The dangers here are you take too much out or your investments don’t perform or you live miles past 84 (expected life span). You could run out of money.
But if you manage it properly any balance remaining can be passed on as an inheritance.
2. Buy an annuity. This is basically an insurance policy. That pays out a fixed amount each month / year. Until you die
As interest rates have recently increased these are much more attractive than they were.
A basic online annuity calculator gives you an annual payout of around £8000
The obvious issues here are that the amount you get is fixed. And normally when you die there is nothing left. So if you die after 2 years, tough, nothing to pass on
But if you live to 110, you are still covered.
You can get options for index linking and preserving an amount for inheritance, but these reduce the payments
3 is a mix of drawdown and annuity
Gives a bit of flexibility,
4. Defer taking pension until a later date, depends on your personal circumstances.
£180k sounds like a lot, but it equates to around 600-750 per month in terms of pension payouts
All income is taxable, and you have the option to take up to 25% of your pot as a tax free lump sum (£45000)
This will reduce the amounts available under drawdown and annuity.
It’s complicated, so take advice
Personally I’d be throwing as much spare cash into the pension pot as possible.
The financial advisor will look at your whole financial situation, including any spouse income, savings, possible future inheritance etc
None of the above constitutes advice,
Are you Limited?
No I’m not Ltd .
Ok, but apart from the Corporation tax benefits, you can still put into your pension yourself like it. Do you have a FA through the Pru?
No , I don’t have a FA at the Pru but I’m sure if I enquired they will be able to supply one . I get tax relief on my monthly payments, but I think everyone does.
Having worked for the PRU for years I am assuming something has changed since I leftOk so in 2 years you will be 61, so 6 years short of state pension age. (Currently £11500 pa but will be around £12500 when you hit 67)
Basically with your prudential pension you have 4 choices. Not in any order
1 Drawdown, this is where you withdraw sums from your pension at your own discretion. Your funds remain invested and you would aim to withdraw 5% pa (£7200) this should keep the capital amount around the same figure.
The dangers here are you take too much out or your investments don’t perform or you live miles past 84 (expected life span). You could run out of money.
But if you manage it properly any balance remaining can be passed on as an inheritance.
2. Buy an annuity. This is basically an insurance policy. That pays out a fixed amount each month / year. Until you die
As interest rates have recently increased these are much more attractive than they were.
A basic online annuity calculator gives you an annual payout of around £8000
The obvious issues here are that the amount you get is fixed. And normally when you die there is nothing left. So if you die after 2 years, tough, nothing to pass on
But if you live to 110, you are still covered.
Pru is now under M&G Wealth. They do a flexible drawdown product now, as my private pension I took out in about 1986 has now been transferred over to one. The Pru has changed massively now though.
Are you in RPS, like myself?
No tfl pension don't think we come under RPS we have our own fund that's managed by the trustees
It's similar though. I took my lump sum together with my BRASS (AVC's) in December but carrying on working
I was being very generic in describing what an annuity is.
I was being very generic in describing what an annuity is.
I did also say that there were options to index link and to preserve an amount for inheritance.
The options available are changing all the time, which is why independent financial advice is a must
My pension date was when I was 62 that's why I took it. They won't have you taking it early and carrying on working
