Pension stuff, how's it all looking ? HAve you prepared ?

[Horse]

On my work pension, if you failed to nominate a beneficiary, the pension fund would become part of your estate,

That would make it liable for inheritance tax, as well as other complications.

... Such as if you die intestate it might take years to sort out.

[Dodgy69]

I think with final salary schemes, when you die some of your pension dies with you and next of kin gets part of it. I could be wrong on that mind. With a drawdown pension, it all goes to nok..

My pension is managed for me in a diversified portfolio, so eggs not in one basket. I have a meeting on the 24th to discuss risk and whatever. It's good to get the view's of other's so I've a bit of ammo to use.

Pension providers generally tell you to leave the tax free portion in the scheme but then, they probably would.

[Mr. Dazzle]

Pension providers generally tell you to leave the tax free portion in the scheme

Mine didn't. TBF i was just asking out of curiosity more than anything, it's >20 years off for me.

It's pretty poor advice IMO, so if they're advising that maybe look for advice elsewhere Also note that your provider can't actually give you a recommendation and they (should!) make that pretty clear in any discussion.

[Count Steer]

Pension providers generally tell you to leave the tax free portion in the scheme

Mine didn't. TBF i was just asking out of curiosity more than anything, it's >20 years off for me.

It's pretty poor advice IMO, so if they're advising that maybe look for advice elsewhere Also note that your provider can't actually give you a recommendation and they (should!) make that pretty clear in any discussion.

True Potential are 'Wealth Managers' and financial advisers rather than pension providers.

[Buckaroo]

think with final salary schemes, when you die some of your pension dies with you and next of kin gets part of it. I could be wrong on that mind. With a drawdown pension, it all goes to nok..

Final salary or defined benefit pensions ordinarily drop by 50% if the pension holder dies. Also, should you nominate a beneficiary and die before you commence taking the pension, the widows payment is a lot less than 50%.

My good friend and work colleague went too soon and his wife received a pittance each month. He'd paid in a lot to the scheme. Makes me angry even after some years have passed.

[Horse]

My pension is managed for me in a diversified portfolio, so eggs not in one basket.

Beware.

They adjust the mix towards 'low risk' towards retirement.

Mine was moved to largely 'gilts'. Which have plummeted in value.

Advice I've had is to keep them until

[Count Steer]

think with final salary schemes, when you die some of your pension dies with you and next of kin gets part of it. I could be wrong on that mind. With a drawdown pension, it all goes to nok..

Final salary or defined benefit pensions ordinarily drop by 50% if the pension holder dies. Also, should you nominate a beneficiary and die before you commence taking the pension, the widows payment is a lot less than 50%.

My good friend and work colleague went too soon and his wife received a pittance each month. He'd paid in a lot to the scheme. Makes me angry even after some years have passed.

That's

Most companies with half decent pension schemes carry 'death in service' insurance which usually pays a lump sum of 2 to 4× annual salary. (Some companies self-insure and may actually pay more I think).

[Mr. Dazzle]

That's certainly true ^^^.

If I were in Dodgys shoes I'd probably pay a FA for a one off consultancy, rather than letting em take on my portfolio. You're not talking very much money (in relative terms) for that.

[Mr Moofo]

That's certainly true ^^^.

If I were in Dodgys shoes I'd probably pay a FA for a one off consultancy, rather than letting em take on my portfolio. You're not talking very much money (in relative terms) for that.

I think that depends how you are wired. I have a friend who retired at 50 , who gambles on the stock exchange every morning. He has done very nicely but it takes a lot of time (which he has) and isn't always rosy. But he is very OCD - and all the patterns in the numbers make him tick.
Another friend has "invested his because it is not hard to do" - but is not very forthcoming in actually what it is invested in and it yields 100k p.a. (he says). In all the time that I have spent with him, I have never seen him with Investor's Chronicle (my dad's favourite), or reading the FT. Or reading, in fact. So I am really not sure what / who/ where it is invested.
Mine is invested with a FA. It costs me a reasonable amount a year for them to manage... but I am probably too ADAA/ impetuous/ allergic to gambling/ prone to being impetuous to do a better job. So far, it gives me, net, not far off what I was earning before I quit work (which is precisely why I left work). Plus I have to due next to bugger all about it.

One of my better decisions when I was in my 20s was to put in as much as in could into AVCs

[Mr. Dazzle]

That is also true

IMO, even if you want to manage everything yourself there are probably certain 'choke points' when you want ot make sure you're using every avenue available to you. The Tax free lump sum is a perfect example, if you don't take it you're potentially setting yourself up to pay thousands more in Tax. But when you do take it there are all sorts of legal tricks and wheezes to make sure you don't shoot yourself in the foot with Tax either. For that one bit, some professional guidance probably wouldn't go amiss.

[Dodgy69]

Was talking to an old mate a while back who was just about to start drawing his pension at 59 i think. He said he can draw 15/16k a year as his total income and pay no tax, instead of the 12.5k ish tax allowance.

Pensions are all about dodging tax for sure.

[Yorick]

I'm drawing £16k a year tax free from my poorest performing pension pot.
My accountant told me to.

[Count Steer]

That is also true

IMO, even if you want to manage everything yourself there are probably certain 'choke points' when you want ot make sure you're using every avenue available to you. The Tax free lump sum is a perfect example, if you don't take it you're potentially setting yourself up to pay thousands more in Tax. But when you do take it there are all sorts of legal tricks and wheezes to make sure you don't shoot yourself in the foot with Tax either. For that one bit, some professional guidance probably wouldn't go amiss.

It always amuses me that SIPPs were seen as a great step forward and 'giving people control'. Given the financial savvy of the average bod, is having that 'self-invested' control such a good thing? I went from one company where the pension people did all the work to another where, although the company contributions were , I was supposed to make all the decisions about risk etc then ended up with a £lump I'm supposed to manage the investment of - hell, if I'd wanted to be a pension expert I'd have picked a different career path!

[Mr. Dazzle]

I've only ever had one pension that wasn't a SIPP - the very first one I had as it 'appens, my R-R final salary one.

I've also never had anyone actually ask me where I want to "self" invest as far as I can recall. They've always just defaulted to somewhere unless I go out of my way to change it.

One of my colleagues made me laugh actually, he went on a big rant about Blackrock and how they're destroying the world and he wants to nothing to do with them. "You realise the default option for your company pension is a Blackrock fund right?" was my response

[Count Steer]

I've only ever had one pension that wasn't a SIPP - the very first one I had as it 'appens, my R-R final salary one.

I've also never had anyone actually ask me where I want to "self" invest as far as I can recall. They've always just defaulted to somewhere unless I go out of my way to change it.

One of my colleagues made me laugh actually, he went on a big rant about Blackrock and how they're destroying the world and he wants to nothing to do with them. "You realise the default option for your company pension is a Blackrock fund right?" was my response

You'll need to make decisions about it when you retire or it just sits there in whatever endgame/Lifestyle you chose. That's when it becomes an actual SIPP. I assumed you had to choose stuff like risk/growth/Lifestyle options when you joined these schemes. I'm pretty sure I did.

[Mr. Dazzle]

IIRC - and that's by no means certain - they were all "we'll assume you're medium risk, speak now or forever hold your peace" written in the small print.

[Horse]

IIRC - and that's by no means certain - they were all "we'll assume you're medium risk, speak now or forever hold your peace" written in the small print.

My current one (see earlier post re gilts ) has a default but IIRC there's options depending on personal attitude to risk.

[MyLittleStudPony]

Some pension stealers take all of the pension. Some just take a little; they sometimes call themselves financial advisors.


Pension stealer!

[Bustaspoke]

I've also never had anyone actually ask me where I want to "self" invest as far as I can recall. They've always just defaulted to somewhere unless I go out of my way to change it.

When my employer froze the Final salary pension,they put us all in a SIPP with Legal & General.With this pension,unlike the Final salary one,we can choose the level of risk that we're prepared to take.
As I've never worked in the world of finance I've left L & G to make the decisions,but I check on it every month for reference.

[the_priest]

I'm going to be adding to my pension pot in lump sums as that is easier with one off hits. I cannot make monthly contributions without being hit with more charges. So save up and stick it in. That way I'll be able to get closer to the £25k/year mark on my pension including the State stuff, and also have the Final Salary Priest pension and wife's piddling school pension (it will be 4k/year at this rate...). So hoping to clear 30k/year and will use the cash pay out to add the latest solar system with battery to the house we own outright (loan paid off!)