Pensions

[Lloyd90]

My Mrs (and myself) over the years have had a few different jobs. 
 

She is sure she has had a couple company pensions with different places. 
 

None of them are for a significant amount, however she is wondering what will happen to them all? Does she need to chase up and contact each old company individually and ask about it? Ask for them to all be combined or something? 
 

I do have a feeling that a lot of people move around different jobs and don’t look into this type of thing 🤔... I need to look into this myself probably. 

[Ttfjlc]

I would look into it sooner rather than later as I believe to some degree certain pensions aren't worth bothering with. I joined my company's pension scheme at 30, I pay in 6% company 12% and I'm due to get just shy of £5K a year 'if' I retire at 65, talking to a customer a few months ago about pensions, he worked for BAE for 8 years in the 90s, non-contributory scheme lump sum and gets just shy of £5k a year 🙄. 

[AVB]

The best thing to do is to consolidate all of your pensions into one. The easiest is into your current pension scheme. If you contact them and give them details of your old schemes then they will manage everything for you. 
 

if you don’t have a current scheme then there are various pension scheme providers you could choose. 
 

Any questions feel free to shout. 

33 minutes ago, Ttfjlc said:

I would look into it sooner rather than later as I believe to some degree certain pensions aren't worth bothering with. I joined my company's pension scheme at 30, I pay in 6% company 12% and I'm due to get just shy of £5K a year 'if' I retire at 65, talking to a customer a few months ago about pensions, he worked for BAE for 8 years in the 90s, non-contributory scheme lump sum and gets just shy of £5k a year 🙄. 

That sounds like if you buy an annuity. You have the option nowadays to not buy an annuity but to ‘drawdown’ from your pension fund (can be done from age 55). Personally this is what I am doing. More risk as returns are not guaranteed but far higher potential. 
 

 

Edited October 5, 2020 by AVB

[Lloyd90]

19 minutes ago, AVB said:

The best thing to do is to consolidate all of your pensions into one. The easiest is into your current pension scheme. If you contact them and give them details of your old schemes then they will manage everything for you. 
 

if you don’t have a current scheme then there are various pension scheme providers you could choose. 
 

Any questions feel free to shout. 

That sounds like if you buy an annuity. You have the option nowadays to not buy an annuity but to ‘drawdown’ from your pension fund (can be done from age 55). Personally this is what I am doing. More risk as returns are not guaranteed but far higher potential. 
 

 

 

My current scheme is local government (council / local authority). 
 

I can remember all my past employers but not if we had schemes or who they were with... do I have to contact the old employers? 

[blackbird]

1 hour ago, Lloyd90 said:

My Mrs (and myself) over the years have had a few different jobs. 
 

She is sure she has had a couple company pensions with different places. 
 

None of them are for a significant amount, however she is wondering what will happen to them all? Does she need to chase up and contact each old company individually and ask about it? Ask for them to all be combined or something? 
 

I do have a feeling that a lot of people move around different jobs and don’t look into this type of thing 🤔... I need to look into this myself probably. 

Believe me after the hammering the pension market has taken in the last year best not to look what it’s worth today 🤮🤮🤮

[Lloyd90]

3 minutes ago, blackbird said:

Believe me after the hammering the pension market has taken in the last year best not to look what it’s worth today 🤮🤮🤮

We’re only young (30/31). Got plenty of time to go back up lol. 
 

 

[blackbird]

17 minutes ago, Lloyd90 said:

We’re only young (30/31). Got plenty of time to go back up lol. 
 

 

With the current state pension age at 67 believe me unless you can fund it yourself you ain’t putting your feet up in a hurry , you & your generation have this pandemic **** to pay for. What a bloody mess.

Edited October 6, 2020 by blackbird

[sam triple]

4 hours ago, Lloyd90 said:

My Mrs (and myself) over the years have had a few different jobs. 
 

She is sure she has had a couple company pensions with different places. 
 

None of them are for a significant amount, however she is wondering what will happen to them all? Does she need to chase up and contact each old company individually and ask about it? Ask for them to all be combined or something? 
 

I do have a feeling that a lot of people move around different jobs and don’t look into this type of thing 🤔... I need to look into this myself probably. 

I’m in the same boat so I’m off to see a financial advisor to see if I can get them all transferred into one , 

[B725]

You also want to look into an AVC advanced voluntary contributions scheme. It runs along side of your pension and you get full tax relief on it e.g if you payed £100 per month it would only cost you £80.

One of the best things I did over the years its now looking nicely for me.

[Rim Fire]

5 minutes ago, B725 said:

You also want to look into an AVC advanced voluntary contributions scheme. It runs along side of your pension and you get full tax relief on it e.g if you payed £100 per month it would only cost you £80.

One of the best things I did over the years its now looking nicely for me.

I did the same i worked in LLanwern steel works i worked for 21 yrs but came out with 30 yrs pension i was paying 150 a month extra i wasn't paying for all them yrs only the last 7

 

Edited October 6, 2020 by Rim Fire

[AVB]

6 hours ago, blackbird said:

Believe me after the hammering the pension market has taken in the last year best not to look what it’s worth today 🤮🤮🤮

Believe it or not mine has recovered all of the losses and is showing a slight profit. The markets are often detached from reality! 

[Sussexboy]

12 minutes ago, AVB said:

Believe it or not mine has recovered all of the losses and is showing a slight profit. The markets are often detached from reality! 

Same with mine thankfully. 

[WalkedUp]

A good time to have a SIPP with the battering to commercial property values. Will be some bargains coming up, buy via SIPP then convert to C3. 

[gdadphil]

Use this site to track old pension pots. You only need the name of your old Employer

https://www.gov.uk/find-pension-contact-details

cheers

 

 

[TIGHTCHOKE]

Lloyd you have a PM.

[Dan73]

Interesting and timely topic...over the past year I've taken more interest in my 4 work pensions and realised how badly they perform although collectively they are in profit from where they were at the start of the year. We are not talking huge amounts here, I really do need to invest more in them.

Does anyone have experience either managing their pension for themselves or with a provider like PensionBee where they can be consolidated? Just interested in thoughts and experiences. Thanks.

[grahamch]

If you are in a final salay scheme i would leave it where it is

 

[Vince Green]

When my friend Colin died a couple of years back I had to get involved with helping to wind up some of his estate because his sister wasn't really up to dealing with all the paper work.

He had worked for London Underground but only as a track side worker on a fairly low grade, yet his pension was over £40,000 a year. The days of gold plated final salary pensions like that are a thing of the past now.

[AVB]

53 minutes ago, Dan73 said:

Interesting and timely topic...over the past year I've taken more interest in my 4 work pensions and realised how badly they perform although collectively they are in profit from where they were at the start of the year. We are not talking huge amounts here, I really do need to invest more in them.

Does anyone have experience either managing their pension for themselves or with a provider like PensionBee where they can be consolidated? Just interested in thoughts and experiences. Thanks.

I manage both mine and my wife’s pension funds. Mine I consolidated into one of my previous employers schemes vis aegon and my wife’s via the online provider nutmeg. 
 

aegon gives a lot of choice of available funds which I switch in and out of on a regular basis. Nutmeg invest via Exchange Traded Funds (ETF’s) so you set your risk level and all of the investment switches are managed by them. 
 

Personally I think pensions are great with the tax advantages they bring. 

Edited October 6, 2020 by AVB

[The Heron]

And I quote " there are no bad pensions it is just the amount paid at the end" this was said to me 40 years ago luckily I listened to the advice anyone in their 30 s will not see a state pension the thing to do is go and see a financial advisor preferably recommended with all the information and let them help you. 

[JohnfromUK]

A little (very much background) advice - none of which is anything other than a personal opinion, but made sense and worked for me.

1. Start as early as you can, because anything you can put away early benefits from more years of compounded growth
2. Try and have a 'goal' - such as - I would like to (be financially able to retire at xx years old on roughly yy,yyy annual income)
3. Get a financial advisor - either through your work (my work pre retirement provided one who was very good) or independently, or a government pensions advisor which I believe can be arranged for free these days?
4. Work out a strategy to meet your goal - understanding what it may cost and what the risks are
5. Make a plan to follow through and fulfil the strategy - which may be split between pension (tax free on the way in, taxable on the way out) and ISA (taxable on the way in, but tax free for gains and income on the way out, and possibly other things (e.g. property), SIPP etc. and should show you how much you need to put in each 'pot' per year.
6. Use reputable companies (the FSA has a list I believe)
7. Stick with it.  Remember that every time you make a change, someone else probably makes money as commission

There is no better thing than to start early - as there will be both ups and downs along the road, but the longer you are 'in' the more likely that 'up' will predominate.  It is not much good getting to 50+ and deciding you would like to retire at 60 on 75K a year ......... unless you are already very wealthy!

[Lloyd90]

4 hours ago, B725 said:

You also want to look into an AVC advanced voluntary contributions scheme. It runs along side of your pension and you get full tax relief on it e.g if you payed £100 per month it would only cost you £80.

One of the best things I did over the years its now looking nicely for me.

Is that into your normal pension or A whole Separate thing? 
 

My partner and I after a few years of working hard to get ahead are both pushing the upper tax bracket and have been told that contributions to your pension are a big winner at that rate as you basically get an extra 40% added.

4 hours ago, AVB said:

Believe it or not mine has recovered all of the losses and is showing a slight profit. The markets are often detached from reality! 

My S&S ISA has recovered and gone back up to what it was before this pandemic. 
 

Mind you I did sell my shares in London real estate and buy more shares in GP practices.

[B725]

Lloyd 

All local authorities will have access to an AVC provider, it runs along side of your pension and I do believe that you can put in up to 80% of your wages. 

When the time comes depending on the value you can bolt it on your lump sum or take a monthly payment. 

For someone of your age its a no brainer, its a bit like an ISA but paying 20per cent because of the tax relief. 

[JohnfromUK]

29 minutes ago, Lloyd90 said:

have been told that contributions to your pension are a big winner at that rate as you basically get an extra 40% added.

If you pay 40% tax, you can get tax relief on your pension contribution to a pension scheme at that rate.  However there are certain 'limits' which probably won't apply to you now, but might down line;

1. Once your 'pension pot' has reached a certain size, I think the tax relief is no longer applicable.  (You need a pot of over £1M+ for that to apply)
2. There is a limit on how much your contributions can be in a year (to get full tax relief) - that varies with your age - the older, the more you can put in tax free
3. There are also limits for very high earners in the top tax rate I think (not 100% sure as I was never there!)
4. I believe you can use up a previous years 'unused' tax allowance if you have a good year (e.g. big bonus), but you would need to check on that.

But basically - yes - it is a tax saving way of saving for the future.  The downside is that there are currently (and have been more so in the past such as having to buy an annuity) restrictions on how you can draw out that money in your 'pot'.  These are quite complicated - but since you have not been taxed 'on the way in' - many forms of withdrawal are subject to rules and likely tax.  All rules around pensions are subject to regular, often complex, and unpredictable changes imposed by the chancellor of the time.  For example - it is tipped that the chancellor may reduce the tax relief for higher rate tax payers.

The advantages of putting some of your spare cash/savings in ISA are as follows;

1. Although you can only buy it from 'tax paid' income (i.e. no tax relief 'on the way in'), once in for 1 tax year, withdrawals of both income and capital are currently free of all tax.
2. You can draw out from an ISA tax free at any time - for example if you suddenly wanted a lump of cash to buy into say a business, or buy a dream house - you can get at your ISA cash.  Pension - you can't always and may be subject to high tax on lump withdrawals (it's complex).
3. There is a limit (of currently £20,000 per annum) on how much you can put in, but no limit on growth/maximum fund value.  People who have used the ISA scheme to it's full from when it was introduced have now built up large 'pots' that are tax free
4. If you end with with a decent pension (total from state, employment and private pensions), you will probably have to pay tax on it's income each year - but you are not taxed at all on any income from ISA, so it can be very tax efficient 'on the way out'.

Like pensions, all ISA rules are subject to regular, often complex, and unpredictable changes imposed by the chancellor of the time.

Overall - it is a complex minefield, and that is why you need professional advice.  I did a mix of pension and ISA to give me tax relief and flexibility.

[Lloyd90]

21 minutes ago, JohnfromUK said:

If you pay 40% tax, you can get tax relief on your pension contribution to a pension scheme at that rate.  However there are certain 'limits' which probably won't apply to you now, but might down line;

1. Once your 'pension pot' has reached a certain size, I think the tax relief is no longer applicable.  (You need a pot of over £1M+ for that to apply)
2. There is a limit on how much your contributions can be in a year (to get full tax relief) - that varies with your age - the older, the more you can put in tax free
3. There are also limits for very high earners in the top tax rate I think (not 100% sure as I was never there!)
4. I believe you can use up a previous years 'unused' tax allowance if you have a good year (e.g. big bonus), but you would need to check on that.

But basically - yes - it is a tax saving way of saving for the future.  The downside is that there are currently (and have been more so in the past such as having to buy an annuity) restrictions on how you can draw out that money in your 'pot'.  These are quite complicated - but since you have not been taxed 'on the way in' - many forms of withdrawal are subject to rules and likely tax.  All rules around pensions are subject to regular, often complex, and unpredictable changes imposed by the chancellor of the time.  For example - it is tipped that the chancellor may reduce the tax relief for higher rate tax payers.

The advantages of putting some of your spare cash/savings in ISA are as follows;

1. Although you can only buy it from 'tax paid' income (i.e. no tax relief 'on the way in'), once in for 1 tax year, withdrawals of both income and capital are currently free of all tax.
2. You can draw out from an ISA tax free at any time - for example if you suddenly wanted a lump of cash to buy into say a business, or buy a dream house - you can get at your ISA cash.  Pension - you can't always and may be subject to high tax on lump withdrawals (it's complex).
3. There is a limit (of currently £20,000 per annum) on how much you can put in, but no limit on growth/maximum fund value.  People who have used the ISA scheme to it's full from when it was introduced have now built up large 'pots' that are tax free
4. If you end with with a decent pension (total from state, employment and private pensions), you will probably have to pay tax on it's income each year - but you are not taxed at all on any income from ISA, so it can be very tax efficient 'on the way out'.

Like pensions, all ISA rules are subject to regular, often complex, and unpredictable changes imposed by the chancellor of the time.

Overall - it is a complex minefield, and that is why you need professional advice.  I did a mix of pension and ISA to give me tax relief and flexibility.

 

I'll take a hard look at that thank you,

I am currently just under the 40% threshold but think my overtime and odd shifts I pick up might tip me over over a 12 month period. And also this is my first year at this grade, and I go up a point each year.

 

I believe my partner is already ever so slightly over and she isn't in Local Government shes in the aerospace section, so probably worth us going to see someone.