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Thread: Pension planning

  1. #26

    Re: Pension planning

    Quote Originally Posted by IanD View Post
    Also a good idea to have a look at your state pension forecast and find out if you are on track for a full state pension. As I finished work early (56) I've been paying voluntary class 3 National Insurance contributions to bump up my (eventual) state pension weekly amount. Mrs D (now self employed) has been paying class 2 NICs in order to do the same. You can backdate voluntary NICs, too. Currently class 3 is about £780/year. Do the maths and see how much longer you would need to live in order to get your money back and more. You will probably need to pay tax on state plus private pension so, as stated above, drawdown over several years, from a private pension pot is best, to avoid paying (too much) tax.
    Spot on - paying back any missing years is probably the best investment you'll ever make (assuming you're in reasonable health). Usually a payback period of less than three years to get your money back! Every year after that it's a like a free season ticked funded by the Government!

  2. #27

    Re: Pension planning

    Quote Originally Posted by BLUETIT View Post
    You do now !

    They've got to cover their arses, so you've got to show you have taken advice.
    no tit you havent ! theres a box to tick saying you understand what you doing

  3. #28

    Re: Pension planning

    Quote Originally Posted by poc View Post
    no tit you havent ! theres a box to tick saying you understand what you doing
    Not on mine there wasn't.

    Pension firm wouldn't even speak to me, without first getting authorisation off the FA.

  4. #29
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    Re: Pension planning

    Quote Originally Posted by Hilts View Post
    You cant claim State Pension until your qualifying age. To get a full pension at that age you need to have paid 30 years NI.
    That is for a full basic state pension. If you go onto gov.uk to check your own future state pension entitlement (can't do this if you are already getting state pension or deferred) it shows in very big numbers the state pension you should get if you have paid enhanced NI for additional state pension (S2P or SERPS). For most people paying NI as employees with an occupational pension scheme their full entitlement will be the lower basic pension figure (shown in much smaller numbers on the gov.uk page). If that is the case you haven't missed out as the difference in NI payments from employer and employee will have gone into the occupational pension pot.

    The information on making additional NI payments to reach the higher forecast is confused. It doesn't distinguish between topping up the contracted out level of NI with 'missing years' - which in my case were after I retired. I have already got 36 NI qualifying years so shouldn't need to fill in any gaps but it may make sense to top up if that is possible! It will have to be a phone call.

    It was all clear as day 6 years ago - but now not.

  5. #30

    Re: Pension planning

    Every time I have taken financial advice it has ended it tears. Pensions, AVC's and endowment mortgage.
    I have no doubt that many people enjoy great benefits from consulting financial advisers but my fingers have been burned numerous times.

  6. #31

    Re: Pension planning

    Quote Originally Posted by BLUETIT View Post
    Not on mine there wasn't.

    Pension firm wouldn't even speak to me, without first getting authorisation off the FA.
    i didnt see yours but dont always take your opinion as correct

  7. #32

    Re: Pension planning

    Quote Originally Posted by Re-sign Carl Dale View Post
    Spot on - paying back any missing years is probably the best investment you'll ever make (assuming you're in reasonable health). Usually a payback period of less than three years to get your money back! Every year after that it's a like a free season ticked funded by the Government!
    My calculation says payback in just under 4 years...same hymn sheet! I've got another 3 years, 4 if I overpay a bit, of class 3 voluntary NICs to go for a full pension. Careful planning will keep the tax woman at bay, too.

  8. #33

    Re: Pension planning

    Quote Originally Posted by Taunton Blue Genie View Post
    Every time I have taken financial advice it has ended it tears. Pensions, AVC's and endowment mortgage.
    I have no doubt that many people enjoy great benefits from consulting financial advisers but my fingers have been burned numerous times.
    You're not alone - before joining financial services 20 years ago I myself was mis-sold an endowment mortgage!

    Things are infinitely better now than 20 years ago; standards of qualification and professionalism are far higher. However the British Steel pension situation a year or two ago sadly shows that poor advice and mis-selling haven't completely disappeared.

  9. #34

    Re: Pension planning

    Quote Originally Posted by Taunton Blue Genie View Post
    Every time I have taken financial advice it has ended it tears. Pensions, AVC's and endowment mortgage.
    I have no doubt that many people enjoy great benefits from consulting financial advisers but my fingers have been burned numerous times.

    I always ask them, if you're so clever about money, how come you're still working.

    Hate them (apart from my mate, cause he don't charge anything)

  10. #35
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    Re: Pension planning

    Quote Originally Posted by Re-sign Carl Dale View Post
    You're not alone - before joining financial services 20 years ago I myself was mis-sold an endowment mortgage!

    Things are infinitely better now than 20 years ago; standards of qualification and professionalism are far higher. However the British Steel pension situation a year or two ago sadly shows that poor advice and mis-selling haven't completely disappeared.
    On something like pensions, though, you don't really want to get it wrong. So, when it comes to my time I'll be getting advice. Is is possible to get advice from more than one FA, and how likely is it that they will give the same overall advice?

  11. #36

    Re: Pension planning

    Quote Originally Posted by jon1959 View Post
    That is for a full basic state pension. If you go onto gov.uk to check your own future state pension entitlement (can't do this if you are already getting state pension or deferred) it shows in very big numbers the state pension you should get if you have paid enhanced NI for additional state pension (S2P or SERPS). For most people paying NI as employees with an occupational pension scheme their full entitlement will be the lower basic pension figure (shown in much smaller numbers on the gov.uk page). If that is the case you haven't missed out as the difference in NI payments from employer and employee will have gone into the occupational pension pot.

    The information on making additional NI payments to reach the higher forecast is confused. It doesn't distinguish between topping up the contracted out level of NI with 'missing years' - which in my case were after I retired. I have already got 36 NI qualifying years so shouldn't need to fill in any gaps but it may make sense to top up if that is possible! It will have to be a phone call.

    It was all clear as day 6 years ago - but now not.
    Future Pensions is your first stop:

    https://www.gov.uk/future-pension-centre

  12. #37

    Re: Pension planning

    Quote Originally Posted by Don Corleone View Post
    Sounds very sensible advice. The one thing I didn’t get when I asked about transferring a final salary scheme was I was told the transfer value was £190k but the guaranteed pension at 65 only £6k pa. That means I would have to live until I was nearly 100 to get that transfer value in the yearly pension and also the final salary scheme dies with you so wanted to transfer out but the FA wouldn’t advise it as too much risk involved - thought it was much more likely I will die before 100 ( having already survived cancer once) than to live way past 100 but seems all FA,s advise against moving the money from a final salary scheme and you can’t do it without their approval
    Have you seen the advert with the old couple on the sofa and the guy on the jetski?

  13. #38

    Re: Pension planning

    Quote Originally Posted by Re-sign Carl Dale View Post
    If you've been advised against transferring that's probably good advice. Unless it's clear that you can afford to give up a guaranteed income of £6,000 in exchange for flexibility then it's not likely to be in your best interests.

    Unfortunately, when the pound signs start flashing, and the prospect of a juicy fee arise, some less scrupulous people would suggest transferring - and get paid handsomely.

    Although £6k per annum may not seem a huge amount, it's a guaranteed income which is also inflation proofed for the rest of your life ... so that £6,000 today will be £6,100 next year, and so on. Plus if you're in a relationship there would usually be a widow's pension in there for those left behind. A £190k pot would be unlikely to provide the same level of guaranteed pension from an annuity, which should always be the starting comparison.
    Such a difficult call this one, as there are so many things to take account, as you have highlighted. I spoke to 3 different IFAs and ended up cashing my final salary in. My wife kept hers. As someone once said to me you'll only really know what was the right decision after you die!

  14. #39

    Re: Pension planning

    Quote Originally Posted by CCFCC3PO View Post
    On something like pensions, though, you don't really want to get it wrong. So, when it comes to my time I'll be getting advice. Is is possible to get advice from more than one FA, and how likely is it that they will give the same overall advice?
    Spot on. If your sitauion is really complex, or you are looking at investing a really large sum of money, I often recommend chatting to a couple of IFAs and make sure that you find someone that you're comfortable with and can work with.

    The overall advice should be similar - there will be nuances, and no two advisers are likely to recommend the same specific investment - however whatever is recommended should be suitable for you.

  15. #40

    Re: Pension planning

    Quote Originally Posted by IanD View Post
    My calculation says payback in just under 4 years...same hymn sheet! I've got another 3 years, 4 if I overpay a bit, of class 3 voluntary NICs to go for a full pension. Careful planning will keep the tax woman at bay, too.
    I haven't paid any NICs since 2005. I have 5 missing gap years to make up to qualify for a full pension.
    I made a bank payment (class 3) last week for one of those missing years. Once they update my record on the Government Gateway site, I'll make the remaining four payments in one go.

  16. #41

    Re: Pension planning

    Quote Originally Posted by jon1959 View Post
    That is for a full basic state pension. If you go onto gov.uk to check your own future state pension entitlement (can't do this if you are already getting state pension or deferred) it shows in very big numbers the state pension you should get if you have paid enhanced NI for additional state pension (S2P or SERPS). For most people paying NI as employees with an occupational pension scheme their full entitlement will be the lower basic pension figure (shown in much smaller numbers on the gov.uk page). If that is the case you haven't missed out as the difference in NI payments from employer and employee will have gone into the occupational pension pot.

    The information on making additional NI payments to reach the higher forecast is confused. It doesn't distinguish between topping up the contracted out level of NI with 'missing years' - which in my case were after I retired. I have already got 36 NI qualifying years so shouldn't need to fill in any gaps but it may make sense to top up if that is possible! It will have to be a phone call.

    It was all clear as day 6 years ago - but now not.
    I contributed to a German State Pension for about 15 months in the late 70's - and three of those months I was on 'Schlechtwettergeld' (i.e. paid only a proportion of my wages when the weather wouldn't permit me to work as a labourer on a building site) and for three weeks between jobs I was on the German dole. For that 15 months my German pension will be around 5% of the value of my UK State Pension!

    The moral of the story is: build up a State Pension elsewhere once you have contributed for the required period in the UK.

  17. #42
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    Re: Pension planning

    Quote Originally Posted by Re-sign Carl Dale View Post
    Spot on. If your sitauion is really complex, or you are looking at investing a really large sum of money, I often recommend chatting to a couple of IFAs and make sure that you find someone that you're comfortable with and can work with.

    The overall advice should be similar - there will be nuances, and no two advisers are likely to recommend the same specific investment - however whatever is recommended should be suitable for you.
    I am going to avoid the bloke that effed up our mortgage when we were buying a house. Deal nearly collapsed and we had already moved out from the other place. Saying that, he'll be retired by then anyway, unless he follows his own advice in which case he will still have to work

  18. #43

    Re: Pension planning

    Quote Originally Posted by The Gifaffe View Post
    Have you seen the advert with the old couple on the sofa and the guy on the jetski?
    That advert warning of Scams is the best thing that the FCA have ever done. Many would say it's about the only good thing that they've done.

    Last week a client of mine, who we've been looking after for over 10 years encashed £250,000 to invest in what stinks of a financial Scam. He's been promised a 'guaranteed' return of 8% per annum income, and they're paying this on a sample of £10k that he invested two months ago.

    I would bet my house that he, or his family will never see any of that money again - and the people he's given it to are not FCA regulated so he's got absolutely no recourse if they spend the £250k on Jetskis.

    It gets my blood boiling just thinking about it.

  19. #44

    Re: Pension planning

    Quote Originally Posted by Taunton Blue Genie View Post
    I contributed to a German State Pension for about 15 months in the late 70's - and three of those months I was on 'Schlechtwettergeld' (i.e. paid only a proportion of my wages when the weather wouldn't permit me to work as a labourer on a building site) and for three weeks between jobs I was on the German dole. For that 15 months my German pension will be around 5% of the value of my UK State Pension!

    The moral of the story is: build up a State Pension elsewhere once you have contributed for the required period in the UK.
    Wayne or Neville... pet?

  20. #45
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    Re: Pension planning

    Quote Originally Posted by Re-sign Carl Dale View Post
    Hmmm ... yes and no.

    'Recycling' your tax free lump sum back into a pension to get tax relief again is prohibited by HMRC. (Any pension has a declaration that you need to sign to confirm that your contributions haven't come from a pension lump sum).

    However there's nothing stopping you living off that lump sum, and moving money from your own personal savings into a people's pension or similar.
    What's a "people's pension"?

    I have another question on NICs - I looked at my record and for the period I was in HE I have missing years. That doesn't seem fair/correct. Anyone any idea on this?

  21. #46

    Re: Pension planning

    I think you need to make this a sticky Mike, I'm sure many will look it up in the future. It sounds like I'm in the same boat as many with 4 different company schemes. I'll look to retire in the next 2~3 years but need to understand the numbers as I got shifted from 65 to 66 (not as bad as my wife who moved from 60-67!)

  22. #47

    Re: Pension planning

    Quote Originally Posted by Rock_Flock_of_Five View Post
    I haven't paid any NICs since 2005. I have 5 missing gap years to make up to qualify for a full pension.
    I made a bank payment (class 3) last week for one of those missing years. Once they update my record on the Government Gateway site, I'll make the remaining four payments in one go.
    It can take a month or two for your online record to be updated. Tip: give HMRC a ring a couple of weeks after paying your NIC to check payment has been credited to your account. When it comes to the HMRC voice-activated "in a few words tell us why you have rung us today" say nothing. Keep saying nothing to any further questions until the one about "is it you you are ringing about" ( or something like that). Say "yes" and you will get straight through to an HMRC advisor.

  23. #48

    Re: Pension planning

    And if there are any younger guns on here, I would like to suggest you look into opening a stocks and shares ISA, best advice I ever had as a kid

    I invested £12,000 inheritance at 19 years old, and just choose 20 random mutual funds from hargreaves & lansdown and put £600 in each of them.

    my average return for the last 9 years has been 8%-15%

    the compound interest in the real shit, at current protections that £12,000 will be worth around £450,000 - £500,000 at 55 years old. the hardest part was not touching it! not even for a house deposit.

  24. #49

    Re: Pension planning

    Quote Originally Posted by Bluebird23 View Post
    Are you sure that’s correct? (I hope you are).

    I thought I saw it had been changed to I think 37 years NI, for a full pension.
    Yeah looking at gov.uk the new State Pension full amount suggests 35 years.

  25. #50

    Re: Pension planning

    Quote Originally Posted by az city View Post
    What's a "people's pension"?
    A top up to the state pension where both the employer and the employee pay into a private pension pot. The idea is that the government cant afford to pay state pensions for ever, given the demographic time bomb that is our aging population so, eventually, state pensions will get smaller as a proportion of the overall government liability. Individuals will have to save for their retirement or work until they are 75.
    I have another question on NICs - I looked at my record and for the period I was in HE I have missing years. That doesn't seem fair/correct. Anyone any idea on this?
    Did you work p/t and not pay enough NICs in a financial year to qualify? What sort of contract were you on....classed as self-employed? Best get back to the employer and check your pay slips from the period involved.

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