Pensions

[michele]

When I worked on the Buses we had a pension scheme.

Then I left it's frozen until I reach 65 . I left and worked for a Doctor whom did not run a scheme .

 

All these years later should I be adding to that pension i do live each day as it comes with a you could get run over by a buses tommorw attitude.

Question is should I still be syphoning some money off are they worth it are they not . I watched a programme the other night about what happened to our pensions I have to admit I am lost ?

 

Should I shouldn't I put money away or just bank it myself ?

what should one do for the best ? Confused but I thinks I should be saving for a rainy day ... :-|

[Guest Frank Wilkinson]

Unless you really need the money I would keep it in place. When you retire it could just make the difference between being slightly hard up and comfortably off.

If you draw down the cash then you'll find an excuse to spend it - or at least I would!

[Brian Kirby]

Michele

Might be worth checking whether the pension is still healthy.  If you know who is in charge of it ask them for an illustration of its value, and whether you can add to it.

However, you may do better by using ISAs to the maximum permitted amount. 

Don't know if you are working or pay tax, but the main advantage of pensions is that the contributions come from your income before it is taxed.  Therefore, if you don't pay tax, they are not so good.  However, the pension itself, when it is paid out, will be taxed if it sufficiently large.

ISA contributions, on the other hand, are not tax exempt, but the returns are.  So, if you have no income from which you can escape tax on pension contributions, I think it pays to buy ISAs, and then get a payout that isn't taxed.

[mark lambert]

I would make an appointment with a reputable independent financial advisor, they know the ins and outs and can explain it in laymans terms.they normally give you a free consultation,they would normally get their pay(commision), from policies they sell. they wont sell you policies you dont need, they cant tell you to sell a policy you already have, they can give you advice on mortgages,get you a better deal, and they do the paperwork. I'm not in any way involved in this line of work, but i wouldn't be without my financial advisor,he's saved me a fortune. He is a friend of mine, which helps. Have a word with your bank, but remember, your bank will only sell you their own policies, not independent! i hope this helps

choppa

I hope all is well with the little one

[keninpalamos]

For heavens sake don't go to a bank find an independant FA

[Wingpete]

Many years ago, I left the Fire Brigade to do same job at a paper mill. Wages OK, and still pensionable. The factory workers took home lots more dosh than I, and some managers said to join them and blow the pensionable elements, as by time retirement comes, the State will look after you. Take the money and enjoy it, was the advise.

I didn't take that advise, and rejoined Fire Brigade, and paid into pension fund until retirement came. That gave nioce pension.

Then took NHS job for 16 yrs. Also contributed to pension there.

When eventually taking redundancy from NHS, took their payoff, plus their pension.

Started "consultancy" doing same work for NHS as before, which paid more than working directly for them.

Now got OAP as well.

As succesive Govmts have continuously moved the goal posts, as regards pensions, contributions and ages to draw on them, it all became very motivational as to what to do to suit your particular circumstances.

Do you take whatever is on offer "today" or plan ahead in the hope changes will not adversly affect you individually.

To do that you need a crystal ball.

There are too many people who did what was right at the relevant time, to now find they have no pension, and continue to work when they ought to be happily retired, having planned ahead, only to find the Govmt has allowed fraudsters to raid the pension funds they created.

So, having thought about retrioement long ago, I am fortunate enought to be able to enjoy retirement on 3 pensions, although never a big earner.

Judgement is great, when hindsight is clear.

 

[breakaleg]

back in 2003, i was comming home on my motorbike, when a car came out from a side road, i didnt think that i would retire when i was 47, i' am soooo glad i paid into a pension scheme

pete

[Guest starspirit]

Pensions used to be my job in the 80's Michele and the first thing to do is to contact the fund administrators to find out what your own fund is worth.

 

Depending on how good the fund, and it's managers are, you might be better off leaving it where it is because they have to at least revalue it each year in line with inflation and there are usually, but not always, more safeguards with a properly funded occupational pension scheme than there are with personal pensions.

 

This is now less true of the latest brand of 'money purchase' schemes than it was with the rapidly fading 'final salary' schemes which are going out of fashion with employers due to the high cost of providing such schemes. Generally speaking if you can get into a FS scheme take it as you will be hard pushed to better it's return anywhere else.

 

You then need a decent infependent pensions adviser - NOT one of the banks as they can sometimes be poorly trained and will be under great pressure to sell their own brands.

 

Maybe your other half knows someone in the federation he trusts who will help?

 

You are now entitled to save up to £3600 a year gross into a personal pension fund which, as Grasping Gordon allows you a 22% tax rebate, means you pay only £2808 net meaning you show a £792 profit before you start - less of course the funds costs.

 

Some funds allow you to pay this monthly but you generally get better vfm by paying once a year if that is manageable.

 

The fund will then grow by whatever the expertise of the managers, the stock market fluctuations and Government interference allow it to untill such time you are ready to spend it. Normally anytime after age 50 - rising soon to 55.

 

At this point you will be entitled to 25% of the fund value as a cash lump sum - if you wish - with the balance used to buy an annuity - which is only a technical term for a life assurance contract that takes your cash and gives you a guaranteed income for life which you can then have with or without certain guarantees.

 

By the way Life Assurance - Car Insurance - what's the difference?

An insurance pays out if a specified event occurs - ie car crash.

An Assurance pays out when a specific event takes place - ie you die.

As we all die that is why it's called assurance - because it is assured to happen.

just thought I'd bung that one in!

 

And finally, although I am over 60 and drawing a company pension I am still paying into a fund to top up my pension at 65 because I reckon the returns to risk ratio is unbeatable.

 

Hope this helps

[Brian Kirby]

mark lambert - 2007-01-29 8:36 AM I would make an appointment with a reputable independent financial advisor, they know the ins and outs and can explain it in laymans terms.they normally give you a free consultation,they would normally get their pay(commision), from policies they sell. they wont sell you policies you dont need, they cant tell you to sell a policy you already have, they can give you advice on mortgages,get you a better deal, and they do the paperwork. I'm not in any way involved in this line of work, but i wouldn't be without my financial advisor,he's saved me a fortune. He is a friend of mine, which helps. Have a word with your bank, but remember, your bank will only sell you their own policies, not independent! i hope this helps choppa I hope all is well with the little one

To this, I would add, engage more than one IFA and look carefully at what they each offer.  Say 3, and don't tell them you're doing this! 

They'll sit in your living room for hours - drinking your tea and nibbling your biscuits and playing on their laptops. 

Don't buy anything from them at the time of the visit, which will annoy them, but insist you get their advice confirmed in writing before you act.  Then do nothing unitl you have the advice from all three and have compared it.

They do live off commission, and will be inclined to steer you towards products that offer the highest commissions.  They may be open and explain what the commission is. 

If you go the other route, and get an IFA to give you advice for a fee, you should get any commission paid by the provider returned to you, or paid into your fund. 

However, nearly all the advice conforms to a formula and the guys selling, even as IFAs, have often only recently been trained (often by the groups they represent).  Few are real financial markets experts, and most work within a number of "safe" products that may/may not not give you the best returns, but won't leave them exposed to a charge of giving poor advice.

I have not been hugely impressed with IFAs despite several gos, both commission based and fee paying.  It is a bit of a jungle.  Best of all is if you can find someone who really knows the markets and spends time studying them, rather than just selling.  If you're lucky you may get someone of that ilk from recommendation - possibly via the Police Federation or similar.

[W3526602]

Hi,

 

This is personal.

 

I spent 9 years in the RAF, 1958 to 1967. I knew I wouldn't get an ocupational pension, you had to do 22 years to get that. What I didn't know was that my wages were being "abated" to pay for the pension I was not going to get.

 

My wife did 4 years in the Civil Service (same sort of abated salary - 8.5%) She resigned to marry me, come to Malaya. Her pension was "preserved" as she was leaving for reasons connected with marriage. She returned to the CS several years later, but resigned again after 3 years to have a baby. She forfeited her pension entitlement for BOTH periods of service. And nobody told her!

 

The law changed in 1972.

 

 

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[Dave Newell]

I don't think it matters any more which company you have a pension with. My father had a company pension with one of the biggest names in the business. Several years ago they declared they'd overplayed their hand and couldn't afford to pay out the amounts promised. My father's pension is now worth about 1/8th of what it was supposed to be and instead of expecting an annual increase it actually goes down each year. If this is what one of the biggest pension companies can do how can anyone believe they won't get royally shafted?

 

If you can afford it bricks and mortar are the safest investment going!

D.

[Guest starspirit]

That is bl##dy disgraceful John.

 

I don't know about your RAF pension John but you might like to talk to an independent pension specialist, I suggest one in a 'military' town might be more au fait with the rules - or maybe the RAFA might be able to help?

 

As far as I know, unless your good lady took a refund of contributions when she left, any government department pension should still be there.

 

However it will be tiny as even with revaluations it still basically relates to the then final salary. Try the CS and/or local govt. pension scheme websites.

 

Got to be worth a try?

[W3526602]

Hi starspirit,

 

Thanks for reply. The military pensionsare being pursued, and I believe the matter is now being appealled in Europe

 

My wife played it exactly by the book. She resigned at the appropriate time before the baby was born, didn't work the sick leave scam. She didn't take any sort of mariage/short service gratuity. Nobody told her she would lose her pensions. The only advice she recieved was not to resign in case the baby was still-born. The Civil Service claim that all this was common knowledge. At the relevent time, it was a rare if not unique occurance for a woman to be reinstated back into the CS. It was long before that that a woman had to resign on marriage, and come back as "unestablised"

 

Our problem is finding out how/why she forfeited her pension. Anybody we ask first say it is wrong, then come back and say its right.....but they won't tell us why its right.

 

But if the Government (of any colour) can work the rules to their own advantage, what are the chances of a private company not doing the same?

 

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[Brian Kirby]

John

If you have the service dates, and know which pension scheme she was under, see if the appropriate Civil Service union can help.

Even if she wasn't a member, they should know what the rules were, and should also have access to specialist pensions/employment law lawyers, if it gets to that.

They'd probably be able to let you have a copy of the rules of the appropriate scheme, at least insofar as the termination of service was concerned.

[W3526602]

Hi Brian,

 

My wife was not a member of the Union. She was recommended a firm of solicitors, but when she approached them, they replied that the already acted for the Union, and refused to act for her, as it might adversly affect the Union. ????????

 

I tried getting help from my CS Pensioners Union, but seemed to consider it all "done and dusted" many years ago, and said it was pointless pursuing the matter. But again, they didn't tell me where to find the rules governing my wifes particular situation. They may be right, but it "feels" wrong, so we want to see it in black and white ourselves.

 

We will keep nibbing away at it. I wondered if it might be easiest/cheapest to make a Small Claim, demanding the CS pay her what was missing from her "lump sum". That should concentrate their minds, but perhaps £6000 is too much to go that route.

 

Anyway, at present we are waiting for her old Personel Branch to produce documents that she has no recollection of signing.

 

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