[Misc] Retirement

[dazzer6666]

I thought you could split your pot between drawdown and/ or an annuity? Some clever bod will be along soon and put me right.

You can (at least for most for DC pots anyway).

 

[A mex eyecan]

I thought you could split your pot between drawdown and/ or an annuity? Some clever bod will be along soon and put me right.

yes i believe you can

 

[Weststander]

BBC4 R4's fantastic You & Yours today, was wall-to-wall stories and advice about pension saving/planning/required retirement incomes. Answering callers Q&A's.

https://www.bbc.co.uk/sounds/play/m001kh48

 

[Tim Over Whelmed]

I thought you could split your pot between drawdown and/ or an annuity? Some clever bod will be along soon and put me right.

With an annuity I have a significant issue on the type I choose, my Wife is younger than me and, I believe, women tend to live longer, so I need to make sure it carries over.

 

[sparkie]

Any state pension age change decisions have been delayed until ( up to 2 years ) after the next General Election. 10 years notice will be given about any change in date.

 

[cloud]

Increasing the state pension age makes it harder to voluntarily increase your state pension by working another 6-12 months.

 

[Mancgull]

I thought you could split your pot between drawdown and/ or an annuity? Some clever bod will be along soon and put me right.

You certainly can split a pension between drawdown and annuity purchase and this can hedge the ‘mortality risk’ ie the risk of living a long life and running out of money.
More people have moved to this approach as annuity rates have increased, particularly over the past 12 months.

 

[HalfaSeatOn]

This was on ‘you and yours‘ R4 last Tuesday. Blimey was my immediate thought. Presume figures are nett rather than gross. £34k for moderate living standard for a couple.

Home - PLSA - Retirement Living Standards

Home - The Retirement Living Standards have been developed to help us to picture what kind of lifestyle we could have in retirement.

www.retirementlivingstandards.org.uk

 

[GOM]

This was on ‘you and yours‘ R4 last Tuesday. Blimey was my immediate thought. Presume figures are nett rather than gross. £34k for moderate living standard for a couple.

Don't forget £20k of that will be from full state pension for a couple (if you have it).

 

[HalfaSeatOn]

Anyone puzzled over their specific date of retirement? I have a scenario whether to take a defined benefit pension (ie final salary) just before or after the tax year 2023/24. It’s around the lump sum element. If inflation/cpi is high, it seems to me it could be worth delaying taking pension in March’24 as it is outweighed by the lump sum element getting cpi’d from 8/4/24 or am I missing something? Googled this for awhile without any relevant results. I’m also aware cpi unlikely to be as high as April 23 (10.1%) but just wanted to make sure I understand this option.

 

[timbha]

Anyone puzzled over their specific date of retirement? I have a scenario whether to take a defined benefit pension (ie final salary) just before or after the tax year 2023/24. It’s around the lump sum element. If inflation/cpi is high, it seems to me it could be worth delaying taking pension in March’24 as it is outweighed by the lump sum element getting cpi’d from 8/4/24 or am I missing something? Googled this for awhile without any relevant results. I’m also aware cpi unlikely to be as high as April 23 (10.1%) but just wanted to make sure I understand this option.

Not sure how cpi and inflation have any impact on the lump sum element of a DB scheme

 

[East Staffs Gull]

Not sure how cpi and inflation have any impact on the lump sum element of a DB scheme

If I recall correctly, someone’s maximum lump sum from a DB scheme is directly related to the amount of their pension. DB pensions are revalued annually, both in deferment and in retirement, on a date stipulated in the scheme’s rules, i.e. not necessarily 6 April. The annual increase in pension is usually capped, so not necessarily full CPI. This means that the maximum lump sum will increase each year.

 

[timbha]

If I recall correctly, someone’s maximum lump sum from a DB scheme is directly related to the amount of their pension. DB pensions are revalued annually, both in deferment and in retirement, on a date stipulated in the scheme’s rules, i.e. not necessarily 6 April. The annual increase in pension is usually capped, so not necessarily full CPI. This means that the maximum lump sum will increase each year.

That sounds about right and it is the cap that is the issue under the circumstances the poster provides, not cpi.
Whilst it’s tempting to leave your pension pot and lump sum to get bigger and bigger, why not take it when you want/need it so you can enjoy it, rather than trying to squeeze a few extra quid out of the pot?

This is not advice and the individual should consult an IFA.

 

[HalfaSeatOn]

If I recall correctly, someone’s maximum lump sum from a DB scheme is directly related to the amount of their pension. DB pensions are revalued annually, both in deferment and in retirement, on a date stipulated in the scheme’s rules, i.e. not necessarily 6 April. The annual increase in pension is usually capped, so not necessarily full CPI. This means that the maximum lump sum will increase each year.

Thanks. Mine is the minimum lump sum as want to max annual pension. My scheme is the first Monday in new tax year and incurs full cpi increase on that day. As an example, a lump sum of £50k increased by 10.1% on 10/4/23 so £5k not an insignificant amount compared to no increase the day before! Well that’s my understanding which I’ll check out.

 

[timbha]

Thanks. Mine is the minimum lump sum as want to max annual pension. My scheme is the first Monday in new tax year and incurs full cpi increase on that day. As an example, a lump sum of £50k increased by 10.1% on 10/4/23 so £5k not an insignificant amount compared to no increase the day before! Well that’s my understanding which I’ll check out.

If that’s the case then it seems sensible to hold on, but check it out cos it could be too good to be true!

 

[East Staffs Gull]

Thanks. Mine is the minimum lump sum as want to max annual pension. My scheme is the first Monday in new tax year and incurs full cpi increase on that day. As an example, a lump sum of £50k increased by 10.1% on 10/4/23 so £5k not an insignificant amount compared to no increase the day before! Well that’s my understanding which I’ll check out.

I’m probably being a bit dense, but if you want to max your annual pension, why are you considering taking any lump sum? The greater your lump sum, the more annual pension you have to give up, or are you in one of those public sector DB schemes where the pension and lump sum accrue separately? Indeed, if your CPI increases are not capped, then perhaps that is indicative of you being in such a scheme.

 

[jakarta]

I’m probably being a bit dense, but if you want to max your annual pension, why are you considering taking any lump sum? The greater your lump sum, the more annual pension you have to give up, or are you in one of those public sector DB schemes where the pension and lump sum accrue separately? Indeed, if your CPI increases are not capped, then perhaps that is indicative of you being in such a scheme.

Cashing in when I stop my Consultancy work at Christmas after 38 years because I want to use my lump sum to do stuff while I am still fit to do so e.g. an Arctic Cruise.

I'm lucky that Mrs Jakarta has an ex-Head Teachers Pension and our Mortgage is paid off. Already drawing down a small pension from my time in the Chemical Industry and I'll keep up my work at a London University for as long as I can. 5 years off State pension, but not holding out much hope for it!

 

[Jack Straw]

Deleted

 

[Jack Straw]

I assume you're in the Arundel area going by your avatar? But, if you're in Brighton, or Hove actually, or somewhere nearby, PM me and I can get you involved in organised kick-abouts. I'm 66 and play proper football three times a week.
I also retired at 60 years old. Where the last six years have gone is a complete mystery. It's gone in a flash.
Initially, it was really strange, waking up when I woke up - no alarm clock any more, then wondering what to do. Once I sorted out a new routine, which took about three months, I've not looked back.
I look after a couple of friends' gardens, and generally just take my time doing all the things I used to have to cram in to a busy week. It's all about being content in your mind.
The best advice I was given is that you don't have to do anything. I used to think I had to be doing something, but you don't.
I've done a bit of volunteer work for Butterfly Conservation, including building huge bonfires and tree planting.
I just sloth around gently. It's great. I'm back on the French learning, I do a crossword every day and generally just enjoy doing not much. It is an art though, and I can understand people that might struggle having worked all their lives and then suddenly stop.
Hope you sort yourself out a new routine and enjoy yourself.

Add to the above, swimming for an hour once a week, and snooker four hours a week. There's just not enough hours in the day!

 

[HalfaSeatOn]

I’m probably being a bit dense, but if you want to max your annual pension, why are you considering taking any lump sum? The greater your lump sum, the more annual pension you have to give up, or are you in one of those public sector DB schemes where the pension and lump sum accrue separately? Indeed, if your CPI increases are not capped, then perhaps that is indicative of you being in such a scheme.

Not at all behind. In my scheme you can’t forgo all your lump sum. You have to take a minimum amount. I would be happy to give it all up for an increased annual pension but not allowed.