Cash in frozen pension ?

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gbb

Legendary Member
Location
Peterborough
Anyone any experience, positives and negatives ?
Just starting to think about it. The last update, it was worth IRO £45k, which may or may not be a lot in pension terms. It still grows (and i assume potentially loses) so its active, I'm just not paying into it,
Reasons ? I'm 60, having paid into SERPS for many years a government pension update a couple years ago indicated I'd get state pension, plus about the same again, p,us what will be a modest current company pension. I don't have a lot of expenses, live a pretty frugal life myself, don't splash out much, my mortgage is finished this year and have plenty of savings,..well, enough to last a year easily if I had to, more if i had to.

My wife is concerned if something happens to me, she'll never see the vast majority of it.

I was always a procrastinator...just don't know what to do for the best. Eventually I will take the advice of a financial advisor of course, this is just an opening of the page as such, see how others have got on, if you don't mind sharing.
 
D

Deleted member 26715

Guest
You need to see the terms of the pension, it could be or at least should be that in the even of anything happening to you your wife receives the whole sum that is in the pension, but you may have to name her for her to receive this.
 

Paulus

Started young, and still going.
Location
Barnet,
As above, there will probably be a provision for you to "nominate" a person to receive your pension, or a proportion of it whichever the pension provider decrees, should you unfortunately die before your wife.
 

PaulSB

Legendary Member
Obviously very difficult to comment without the full picture but I feel you're wife is right to be concerned.

As far as I'm aware if you die your wife would not receive your state pension. The company pension you say is modest, would this go to your wife?

A year's savings plus £45k, if your wife gets it, is frankly not a lot if her only other income is the state pension.

My wife and I do take the view, as retired people, of live for today but, big but, we know our individual pensions plus state pension would be adequate if one of us dies - we aren't at state pension age yet.

If you were born in 1958 your pension age is 66 years 8 months.

We reckon on £20k per annum to cover all living costs.
 
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mr_cellophane

Legendary Member
Location
Essex
I assume this is the pot from a defined contribution pension.
If so seek advice from the Pension Advice Service. They will recommend an independent financial adviser who will give you some free help.
Your choices will be;
1 - buy an annuity - this will give you a pension of a maximum of around 9% of the pot. It will last until you time, but should have a minimum payout of 5 years. You can reduce this pension by taking 25% of the pot as a tax free lump sum, getting it to increase every year or having a widows pension of 50% should your wife out live you
2 - have an IFA invest the money and take regular amounts from the balance until it runs out. Anything left when you die goes to your estate. Expect a return of 5% from a good investment (but this can go down)
3 - Take it all as cash. 25% is tax free and the rest is taxed at you normal rate.
4 - do nothing until your are 75, then you must do something.

Don't forget that you almost certainly won't need so much money in 20 years time as you will for the first 10 years of your retirement.
 

Levo-Lon

Guru
Not that You would But this is one of those ones the phone scammers try.

Invest it all here.... A lot fall for it,greed is the scammers carrot
 

MarkF

Guru
Location
Yorkshire
@gbb I am similar and in a similar position. I own my house, have savings and when the time comes I'll inherit my mothers and late fathers assets. I have two pension pots that I've not contributed for a long time, both about 40k. Both funds keep sending me letters wanting me to discuss "options", I keep putting it all off, I don't understand financial stuff plus I find the thought of discussing it utterly boring and considering I don't understand it, I won't trust anyone, so I suppose I'll keep putting it off.

Anyway, I do sometimes think about it and in a few years when they mature I going to do them in and get a Porsche 911.:okay:
 

Bonefish Blues

Banging donk
Location
52 Festive Road
If you consolidate it in a SIPP, your wife would be able to inherit it, tax free, up to the age of 75 (yours) at death. I've been researching this with an IFA & a SIPP Provider recently, and think this is the route we'll go with our reasonably-sized pension pots.

You don't need an IFA - I'm simply going to pay mine off for the advice and go my own way, as opposed to them taking a margin year-in, year-out. The low cost online platform I've been talking to charges well below 1% pa for a fully-managed service.
 

Dave7

Legendary Member
Location
Cheshire
My twopence worth if its any use.
When I retired I had a very small private pension (it pays me approx £3K a year) but I had a pot of money.
I went to my bank (TSB) and they arranged a meeting with thier advisor. Because it was over a 'certain amount' they provided thier IFA who was very helpful. It cost me nothing and I have to say that after 5 years his advice proved to be good.
May it be worth going that route ?
 
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Bonefish Blues

Banging donk
Location
52 Festive Road
As long as it's an IFA, as opposed to a tied advisor, then advice is good, but do beware that their business model means that they guide you in a certain way - as an example, the recommended Fund Management Firm from my IFA required an IFA to be in place before they will work for you. What a surprise!

TBH you can do an awful lot yourself at no cost.
 
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fossyant

Ride It Like You Stole It!
Location
South Manchester
Certainly see what your bank can do as Dave7 suggests. They will probably give you free advice. Mine have been good recently.

I have 4 pensions, 21 years in two final salary schemes, and two private pensions that are worth quite a lot in cash terms. I don't/won't need these two come retirement (Im 48) but will look at options once I get nearer 60 as the final salary schemes wont pay out until 65/67. Id be looking at early retirement and using a regular dip into these private pension funds.

I have no mortgage as thats paid off. To retire early I'll need to get some serious savings going on. Can't for the life of me think about working until 67. No chance.

MIL was knackered at that age and has had 15 years of pretty poor quality of life. Good or bad, had she had good health, she would have been very poor financially, as she has no pension. Fortunately with disability benefits she is very well off :ohmy:. Gets more money than my dad does despite his plus 40 years in a pension scheme.
 

Bonefish Blues

Banging donk
Location
52 Festive Road
Any advice from a Bank will typically be around/limited to their own product portfolios, remember.

DB Pensions can typically be taken early, with an actuarial reduction applied according to how long before normal retirement age you intend to take them.
 

SpokeyDokey

67, & my GP says I will officially be old at 70!
Moderator
Anyone any experience, positives and negatives ?
Just starting to think about it. The last update, it was worth IRO £45k, which may or may not be a lot in pension terms. It still grows (and i assume potentially loses) so its active, I'm just not paying into it,
Reasons ? I'm 60, having paid into SERPS for many years a government pension update a couple years ago indicated I'd get state pension, plus about the same again, p,us what will be a modest current company pension. I don't have a lot of expenses, live a pretty frugal life myself, don't splash out much, my mortgage is finished this year and have plenty of savings,..well, enough to last a year easily if I had to, more if i had to.

My wife is concerned if something happens to me, she'll never see the vast majority of it.

I was always a procrastinator...just don't know what to do for the best. Eventually I will take the advice of a financial advisor of course, this is just an opening of the page as such, see how others have got on, if you don't mind sharing.

Here's a link re inheriting SERPS which is very different to inheriting S2P/SAP:

https://www.gov.uk/additional-state-pension/inheriting

The reality is that your wife would receive none of your State Pension and a percentage of your SERPS top-up - see above link.

Lovely Wife has an Aviva pension that was an old company scheme and is worth quite a bit in cash terms. If she dies before me I get the whole lot. However, we will be taking it out on a stage by stage basis to minimise tax liability once she decides when she is going to retire again (she tried it once and wasn't keen on it). Suggest you check the scheme rules to see what the situation is re your £45k.

Someone has already answered re annual living costs. We have decent sized house, no mortgage and live very well on £15k outgoings pa - this excludes any capital expenditure on eg major house maintenance/improvements and new cars etc. It also excludes holidays.

We too used to work on a safety net approach in terms of years 'cover' re savings. If you have 1 year it is really not a lot although it is a lot more than most people have (Google it). We are fortunate enough to be in a position where we are unable to spend (unless we start taking mega-bucks round the world cruises or start buying the kind of cars we used to own - neither of which appeal) what we have saved within our likely lifetimes (I'm 62 and LW is 55) - this was a significant feature of our pre-retirement planning that we started working on 25-ish years ago.

PS: try doing a proper annual budget and then drop that into a cash-flow model for say the next 20 years - you may be pleasantly surprised!

Good luck with whatever you decide and, more importantly, I hope you both have long lives!
 
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alicat

Legendary Member
Location
Staffs
Start reading up on pensions on the government website Pension Wise.

We don't have enough information to be of help. Much depends on whether it is a works pension with defined benefits or a defined contribution pot. If the former, then your wife may get some of the pension payments when you die - that will depend on the terms of the scheme but is normal. If the latter then just make sure it is well-invested and your wife will get what is left of the pot when you die.
 
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