Retirement, how much?
- Thread starter oldfatfool
- Start date
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I'm waiting for my IFA to advise as I'm not judging this on my own! Too important to get wrong!
ColinJ
Puzzle game procrastinator!
- Location
- Todmorden - Yorks/Lancs border
Just as a matter of interest (since I have zero cash to invest) - forgive the pun! 
What comeback do you have these days if an IFA gives you really bad advice and you suffer financially as a result?
I eventually got a decent settlement after being sold an awful endowment mortgage back in the 1980s.
(I specifically asked what would happen if stock market returns fell significantly during the 25 year term and was told that the very worst that could happen would be (say) that the lump sum might be halved, but the mortgage would still be paid off at the end. What actually happened was that that any hope of a lump sum disappeared and I was then getting increasingly dire forecasts for the mortgage debt... 90% to be paid off, 80% paid off... maybe only 70%...?)
What comeback do you have these days if an IFA gives you really bad advice and you suffer financially as a result?I eventually got a decent settlement after being sold an awful endowment mortgage back in the 1980s.
(I specifically asked what would happen if stock market returns fell significantly during the 25 year term and was told that the very worst that could happen would be (say) that the lump sum might be halved, but the mortgage would still be paid off at the end. What actually happened was that that any hope of a lump sum disappeared and I was then getting increasingly dire forecasts for the mortgage debt... 90% to be paid off, 80% paid off... maybe only 70%...?)
- Location
- Somewhere wet & hilly in NW England.
There are enough warnings in any IFA suggested transactions that would negate any liability I would suggest - eyes open!Just as a matter of interest (since I have zero cash to invest) - forgive the pun!
I eventually got a decent settlement after being sold an awful endowment mortgage back in the 1980s.
(I specifically asked what would happen if stock market returns fell significantly during the 25 year term and was told that the very worst that could happen would be (say) that the lump sum might be halved, but the mortgage would still be paid off at the end. What actually happened was that that any hope of a lump sum disappeared and I was then getting increasingly dire forecasts for the mortgage debt... 90% to be paid off, 80% paid off... maybe only 70%...?)
ebikeerwidnes
Guru
- Location
- Z’ha’dum
Endowments were aweful in the 1980s
I was told mine would pay of enough for a £30,000 house - I was going over the top as the house was bought for £24,500
I was told it would almost certainly end up paying of about twice what it was supposed to pay - i.e. £60,000
25 years later it finished - and JUST paid enough for the £24,500
the statements started off showing great returns - after about 10 years they started showing about zero growth even though the stock market was still rising
total rip off - but as it actually paid off the mortgage - even though it only did because I went over the top - I apparently couldn't complain.
Anyway - they seem to have changed the rules a lot and investments like that are no longer available
I was told mine would pay of enough for a £30,000 house - I was going over the top as the house was bought for £24,500
I was told it would almost certainly end up paying of about twice what it was supposed to pay - i.e. £60,000
25 years later it finished - and JUST paid enough for the £24,500
the statements started off showing great returns - after about 10 years they started showing about zero growth even though the stock market was still rising
total rip off - but as it actually paid off the mortgage - even though it only did because I went over the top - I apparently couldn't complain.
Anyway - they seem to have changed the rules a lot and investments like that are no longer available
Jenkins
Legendary Member
- Location
- Felixstowe
It's called the McCloud judgement the final settlement won't be until November 2023 - I was moved to the career average part in June 2016 and have just under 32 years in the final salary part. What I'll probably do is take the final salary part of my pension and the lump sum when I take partial retirement in June and leave the career average part live and continue to accrue and see what the final figures are when they are sent out.
DCLane
Found in the Yorkshire hills ...
- Location
- Dewsbury, West Yorkshire
Like others I was sold a bad endowment in the early 1990's; the promised returns never materialised and we got back below the minimum stated. However, having paid extra off the mortgage we managed to clear that in 2020 as my 'Christmas' present.
mr_cellophane
Legendary Member
- Location
- Essex
I don't think they can change the rate it accrued before the change date. So if it was final salary 1/80 and you had done 20 and currently earning £40k you would get a pension of £10k plus something under the new rules. Whatever that is I could only speculate about.
ColinJ
Puzzle game procrastinator!
- Location
- Todmorden - Yorks/Lancs border
I abandoned ship. I switched to a repayment mortgage and increased the amount from £24.5 k to £60k. I ended paying less for that than the crappy endowment mortgage had been costing me. On top of that I got compensation AND managed to sell the policy on to someone***. I came out about even overall but would have lost out big time if I had carried on as I was.
*** It was a strange feeling knowing that a complete stranger would get paid a lot of money if I suddenly popped my clogs!
ebikeerwidnes
Guru
- Location
- Z’ha’dum
My pension from the big business I worked for for 20 years is just weird
but honest
there are sections from different parts of that time
and some year-to- year bit are duplicated
One always comes out as Zero because the other bit is better
The teacher's pension bit also has different bits - but it is not so pedantic as to tell me all the bits - plus I was in it for less time
anyway - the important bit it to be aware of all the options and work out what is probably best for you
I was dead lucky and rang the teacher pension people a few months before I retired and found that I could claim to be on a 'wind down'and so base my pension on my last salary in the last 5 years
which was WAY higher than what I was on when I stopped
you need to know the details and make them work for you
but it may take some working out
but honest
there are sections from different parts of that time
and some year-to- year bit are duplicated
One always comes out as Zero because the other bit is better
The teacher's pension bit also has different bits - but it is not so pedantic as to tell me all the bits - plus I was in it for less time
anyway - the important bit it to be aware of all the options and work out what is probably best for you
I was dead lucky and rang the teacher pension people a few months before I retired and found that I could claim to be on a 'wind down'and so base my pension on my last salary in the last 5 years
which was WAY higher than what I was on when I stopped
you need to know the details and make them work for you
but it may take some working out
I see the 4% rule as a starting point for working things out.
The ‘inventor’ of it, Bill Bengen, actually said it should be more like 4.1%….but other commentators suggest 3.3% ‘to be safe’.
On your second point, yes: DC (defined contribution) pots pass on to next of kin (including children). You nominate your beneficiaries & the scheme administrators should follow them. It is a great way to keep a chunk of inheritance away from the tax that might otherwise fall.
mr_cellophane
Legendary Member
- Location
- Essex
Well, the tax payable depends on various things, and indeed the administrators have flexibility to not follow the rules, but I believe they would only do that if (for example) the beneficiary contacted them to say "please pass it on to person X because I don't need it"
The question was
Also, my wife has no private pension but I do. If I opt for drawdown rather than annuity then is it right that the pot transfers to my next of kin at my death? i.e. keeps her looked after or my kids get it. If so, this sounds way better than an annuity though I know the annuity gives security.
What in the .gov guidelines make you disagree with my reply?
Landsurfer
Veteran
Always keep track of the small pensions.
On retirement we will have Julies 12 year Military pension, my current 28 year Military pension, (both contributory before anyone comments, 9% of gross salary / annum), ... state pension ... and a number of what we thought where small pointless works pensions .... but it turns out that they add up to the equivalent of an additional full state pension value for us ...
Keep track of the small pensions...
On retirement we will have Julies 12 year Military pension, my current 28 year Military pension, (both contributory before anyone comments, 9% of gross salary / annum), ... state pension ... and a number of what we thought where small pointless works pensions .... but it turns out that they add up to the equivalent of an additional full state pension value for us ...
Keep track of the small pensions...
ebikeerwidnes
Guru
- Location
- Z’ha’dum
Check this out VERY carefully - if in any doubt get advise from a professional
My Dad had a pension that would, he was told, provide for himself and my Mum until the last one died
The way it worked was that he paid in until he retired then the money went into an annuity with the same company
As my Dad was badly injured during the war (it was a miracle I ever came to exist!!!) he assumed that he would be the first to shuffle off
When he was looking at retirement he discovered - via his accountant - that the annuity died when he did
My Mum would be left with naff all
He went rather medieval with the company and got them to give him all the money in order to shut him up - at the time that was not automatically an option
He then invested it via an IFA firm that specialised in retirement funds and it all worked out OK
but if he had retired before checking my Mum could have had problems
'luckily' she died first - by a few months only - so it wouldn;t have mattered - but that was 1/4 century later and the crystal ball was not working so they had to plan for all eventualities
so it is a case of check check check and then check again
and get it all in writing
Hope it all works out
