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

[weeksy]

Right there was one thing i wanted to ask/clear up.

"If you take out some/all of your 25% you can then only put £10,000 a year into your pension in the future"

Someone posted this on another pension discussion. This would be a bit of an issue for me potentially... but just need some clarification on it please ?

I'm pretty sure Mrs. G asked this when we went see our FI last year and was told the answer was no, that's not the case.

I can't recall why, as at that point the coffee and biscuits came in and I saw they had shortbread....

MMmmm go find out big boy... you're one of our resident financial wizards.

[Yorick]

Right there was one thing i wanted to ask/clear up.

"If you take out some/all of your 25% you can then only put £10,000 a year into your pension in the future"

Someone posted this on another pension discussion. This would be a bit of an issue for me potentially... but just need some clarification on it please ?

It may vary from pension to pension. One of mine let's me take cash out and 25% is tax free, rather than just a 25% tax free sum.

[Count Steer]

Right there was one thing i wanted to ask/clear up.

"If you take out some/all of your 25% you can then only put £10,000 a year into your pension in the future"

Someone posted this on another pension discussion. This would be a bit of an issue for me potentially... but just need some clarification on it please ?

You can pay more than £10k but you won't get tax relief on anything over £10k.

'If you take money out in this way, you may only be able to receive tax relief on up to £10,000 a year. If you exceed this figure, you may need to pay tax to HMRC. This is known as the money purchase annual allowance (MPAA).'

[gremlin]

Right there was one thing i wanted to ask/clear up.

"If you take out some/all of your 25% you can then only put £10,000 a year into your pension in the future"

Someone posted this on another pension discussion. This would be a bit of an issue for me potentially... but just need some clarification on it please ?

You can pay more than £10k but you won't get tax relief on anything over £10k.

'If you take money out in this way, you may only be able to receive tax relief on up to £10,000 a year. If you exceed this figure, you may need to pay tax to HMRC. This is known as the money purchase annual allowance (MPAA).'

@weeksy

Yeah. That was sort of what I heard, in between the crunch and slurp of tea and biscuits.

[weeksy]

Right there was one thing i wanted to ask/clear up.

"If you take out some/all of your 25% you can then only put £10,000 a year into your pension in the future"

Someone posted this on another pension discussion. This would be a bit of an issue for me potentially... but just need some clarification on it please ?

You can pay more than £10k but you won't get tax relief on anything over £10k.

'If you take money out in this way, you may only be able to receive tax relief on up to £10,000 a year. If you exceed this figure, you may need to pay tax to HMRC. This is known as the money purchase annual allowance (MPAA).'

And is that done manually by them or something you have to do as a self-assesment ?

[Count Steer]

Right there was one thing i wanted to ask/clear up.

"If you take out some/all of your 25% you can then only put £10,000 a year into your pension in the future"

Someone posted this on another pension discussion. This would be a bit of an issue for me potentially... but just need some clarification on it please ?

You can pay more than £10k but you won't get tax relief on anything over £10k.

'If you take money out in this way, you may only be able to receive tax relief on up to £10,000 a year. If you exceed this figure, you may need to pay tax to HMRC. This is known as the money purchase annual allowance (MPAA).'

And is that done manually by them or something you have to do as a self-assesment ?

Err. Dunno! That's getting a bit specialist. I'd ask your payroll/pension people that one to start with. Someone like Sillycar might have an idea on the mechanics of tax relief application etc.

[weeksy]

You can pay more than £10k but you won't get tax relief on anything over £10k.

'If you take money out in this way, you may only be able to receive tax relief on up to £10,000 a year. If you exceed this figure, you may need to pay tax to HMRC. This is known as the money purchase annual allowance (MPAA).'

And is that done manually by them or something you have to do as a self-assesment ?

Err. Dunno! That's getting a bit specialist. I'd ask your payroll/pension people that one to start with. Someone like Sillycar might have an idea on the mechanics of tax relief application etc.

No worries, it's not for a while yet, so no rush.


I know, I look older

[Cousin Jack]

The thing that pisses me off, is that despite assorted govts encouraging us to invest in long term planning for pensions....

a) They keep changing the rules/options.
b) They make the rules so bloody complicated that only a specialist can understand them.

Grr!

[Count Steer]

And is that done manually by them or something you have to do as a self-assesment ?

Err. Dunno! That's getting a bit specialist. I'd ask your payroll/pension people that one to start with. Someone like Sillycar might have an idea on the mechanics of tax relief application etc.

No worries, it's not for a while yet, so no rush.


I know, I look older

I think it will probably depend on whether the 10k+ is coming directly out of salary and employer contributions, or if you are contemplating putting slabs of cash directly into your DC scheme...or some of both.

As CJ says it's all a bit complicated...for them to administer too. The tax systems must be in the 'maintained to death' state.

[wheelnut]

The thing that pisses me off, is that despite assorted govts encouraging us to invest in long term planning for pensions....

a) They keep changing the rules/options.
b) They make the rules so bloody complicated that only a specialist can understand them.

Grr!

Yeah - waiting for labour to drop the hammer on the amount that can invested each year that you get tax relief on.

Or change it so you can’t get higher rate relief.

Or both!

I don’t think they’ll dare touch the 25%

[Sunny]

I've just whacked up my pension contributions at the new job to 20% all in.
It's a smaller, less-corporate company, so their contribution isn't amazing, which is a shame, but I can afford to whack in a chunk.

First payslip with the new contribution might be a bit painful though

[Count Steer]

And is that done manually by them or something you have to do as a self-assesment ?

Err. Dunno! That's getting a bit specialist. I'd ask your payroll/pension people that one to start with. Someone like Sillycar might have an idea on the mechanics of tax relief application etc.

No worries, it's not for a while yet, so no rush.


I know, I look older

Good news mon ami. The £10k limit applies if you have taken taxable money out of the fund, not tax-free. See:
https://www.fidelity.co.uk/retirement/m ... allowance/

(The UFPLS bit means taxable lump sums ie - 'An UFPLS is a flexible way to take money from your pension. You can withdraw your entire pension in one go, or a bit at a time. An UFPLS withdrawal shouldn't be confused for a tax-free cash pension lump sum, where the entire payment is tax free.')

Still worth getting a bit of professional advice though.

.

[weeksy]

Oh don't worry about that, when I hit 54 I'll be getting fully IFAd up and working all the plans out.

[weeksy]

https://www.retirementlivingstandards.org.uk/

Not sure how the people who are retired/retiring view this... I still struggle a little with how £44,000 and no mortgage only equates to 'comfortable', i'd have thought it'd be a bit more than comfortable.

[Count Steer]

https://www.retirementlivingstandards.org.uk/

Not sure how the people who are retired/retiring view this... I still struggle a little with how £44,000 and no mortgage only equates to 'comfortable', i'd have thought it'd be a bit more than comfortable.

Depends what you're used to as a couple. eg If you've had a combined income of £200k+ then £44k will feel rather different. If you've survived on £50k you will probably feel better off. I'll see if I can dig out the Which? analysis on what you can actually do on a 'comfortable' amount. It's a pretty modest lifestyle in terms of holidays, cars, (and bicycles ), home improvements and general expenditure etc etc.

[weeksy]

https://www.retirementlivingstandards.org.uk/

Not sure how the people who are retired/retiring view this... I still struggle a little with how £44,000 and no mortgage only equates to 'comfortable', i'd have thought it'd be a bit more than comfortable.

Depends what you're used to as a couple. eg If you've had a combined income of £200k+ then £44k will feel rather different. If you've survived on £50k you will probably feel better off. I'll see if I can dig out the Which? analysis on what you can actually do on a 'comfortable' amount. It's a pretty modest lifestyle in terms of holidays, cars, (and bicycles ), home improvements and general expenditure etc etc.

Well yes i get that... but i always equate retiring with paying off the mortgage, which saves over £1000 (close to £1400) a month, so i see my 'need' as going down dramatically. I also struggle to see where £3000 a month goes and disappears to if you've not got a mortgage
That's then not including that Mrs Weeksy would have a job/pension on top ... which again where the heck does all that go lol.
Maybe i'm seeing it with rose tinted glasses, but i honestly see say £44,000 as a great amount for retirement.

[Count Steer]

https://www.retirementlivingstandards.org.uk/

Not sure how the people who are retired/retiring view this... I still struggle a little with how £44,000 and no mortgage only equates to 'comfortable', i'd have thought it'd be a bit more than comfortable.

Depends what you're used to as a couple. eg If you've had a combined income of £200k+ then £44k will feel rather different. If you've survived on £50k you will probably feel better off. I'll see if I can dig out the Which? analysis on what you can actually do on a 'comfortable' amount. It's a pretty modest lifestyle in terms of holidays, cars, (and bicycles ), home improvements and general expenditure etc etc.

Well yes i get that... but i always equate retiring with paying off the mortgage, which saves over £1000 (close to £1400) a month, so i see my 'need' as going down dramatically. I also struggle to see where £3000 a month goes and disappears to if you've not got a mortgage
That's then not including that Mrs Weeksy would have a job/pension on top ... which again where the heck does all that go lol.
Maybe i'm seeing it with rose tinted glasses, but i honestly see say £44,000 as a great amount for retirement.

The £43.1k figure is for a couple.

[weeksy]

Depends what you're used to as a couple. eg If you've had a combined income of £200k+ then £44k will feel rather different. If you've survived on £50k you will probably feel better off. I'll see if I can dig out the Which? analysis on what you can actually do on a 'comfortable' amount. It's a pretty modest lifestyle in terms of holidays, cars, (and bicycles ), home improvements and general expenditure etc etc.

Well yes i get that... but i always equate retiring with paying off the mortgage, which saves over £1000 (close to £1400) a month, so i see my 'need' as going down dramatically. I also struggle to see where £3000 a month goes and disappears to if you've not got a mortgage
That's then not including that Mrs Weeksy would have a job/pension on top ... which again where the heck does all that go lol.
Maybe i'm seeing it with rose tinted glasses, but i honestly see say £44,000 as a great amount for retirement.

The £43.1k figure is for a couple.

I was looking at Comfortable rather than Moderate

[Count Steer]

Ah. Righto. The key figure really is the £59k for a couple. TBH I could probably exist on £44k but my clothes budget is considerably less than hers.

Easiest way to do it is look through a month or two of bank statements and see what you actually both spend and what you both wouldn't spend after retiring.

[weeksy]

Ah. Righto. The key figure really is the £59k for a couple. TBH I could probably exist on £44k but my clothes budget is considerably less than hers.

Easiest way to do it is look through a month or two of bank statements and see what you actually both spend and what you both wouldn't spend after retiring.

Yeah i need at some stage to write a spreadsheet of what goes out in terms of bills.... but i don't think we're quite at the stage where that's necessary yet. It's mostly just me thinking "hmmm and oooh" when i see certain figures.... but i'd expect they've done a bit more indepth research than i have at this stage.