- Location
- Inside my skull
Does "Contracted out" actually reduce the Statutory State Pension, as opposed to the various "add ons" like Serps etc?
You contract out of the earnings related part of the state pension, not the basic state pension.
Does "Contracted out" actually reduce the Statutory State Pension, as opposed to the various "add ons" like Serps etc?
Under the new rules it reduces the amount of state pension payable but not below a minimum value. The relevant NI contributions were transferred to the company pension scheme.Does "Contracted out" actually reduce the Statutory State Pension, as opposed to the various "add ons" like Serps etc?
You contract out of the earnings related part of the state pension, not the basic state pension.
I wasn't aware of the 4% idea but it is otherwise how I have organised our finances. I retired five years ago with a private pension. My wife retired six years with an NHS pension. It is inevitable my wife will pay income tax when she begins to receive her state pension later this but not for myself.How do you feel about this 4% rule? So say you have 300k then by drawing down 4% a year the pot is apparently unlikely to erode in real terms. Just live off that 12k plus state pension as an example.
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.
This doesn't really answer your question although you have received those already but...How do you feel about this 4% rule? So say you have 300k then by drawing down 4% a year the pot is apparently unlikely to erode in real terms. Just live off that 12k plus state pension as an example.
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.
If you don't mind answering can ask if you managed this investment yourself? I don't have the knowledge and would be far too cautious to do so.This doesn't really answer your question although you have received those already but...
... many years ago I decided that the best way to save for old age was to accrue enough of a 'pot' so that I and my wife could eliminate any dependency on pensions.
This was a change to my previous mindset where I guess I had been culturally brainwashed into a 'pension rules!' mentality.
So, once mortgage etc was cleared, we saved very hard and are now in a position to live off of our savings ad-infinitum.
There are any number of online calculators available where you can plug in personal data along the lines of How Long Will My Money/Savings last?
A good number of people appear to forget that their savings pot is an alternative 'fixed' income source.
Not saying the way I decided to do things is best - it's just that you don't have to follow the road well travelled. 😁
No problem re answering.If you don't mind answering can ask if you managed this investment yourself? I don't have the knowledge and would be far too cautious to do so.
Hmmm. Just had a letter from the NHS to say they are changing my pension. Completely unintelligible so will have to get advice. Changing to a career average to work stuff out as far as I can see....
Lots of public sector pensions are doing this; SWMBO is NHS and I'm in the Teacher's Pension
Basically, following a ruling due to the Firefighters union challenging career average pensions, you get two options of final salary / career average. It also depends on your age and when you joined. The choice is made at retirement.
Yes, we're being moved to the 2015 scheme but the service to the transfer date as I understand is protected?Hmmm. Just had a letter from the NHS to say they are changing my pension. Completely unintelligible so will have to get advice. Changing to a career average to work stuff out as far as I can see....
Yes, we're being moved to the 2015 scheme but the service to the transfer date as I understand is protected?