thanks again. just contacted my 4 DC providers, asking about exit fees and theyre all free. so….. nothing to stop me opening a SIPP and sticking them all in there now is there? and ill have to do that within 3 months yep?

just a quick question, chopping and changing your investments within the HL SIPP. does it cost you more the more you fiddle with it, so for each change? i imagine itd be quick addictive looking online, thinking this or that would be better etc…. so is it a bad idea to do this, you should just find something youre happy with and leave it there as long as poss?

and ill have to do that within 3 months yep?

With DC the 3 month valuation doesn’t apply, you just get the fund value on the day.

just a quick question, chopping and changing your investments within the HL SIPP. does it cost you more the more you fiddle with it, so for each change? i imagine itd be quick addictive looking online, thinking this or that would be better etc…. so is it a bad idea to do this, you should just find something youre happy with and leave it there as long as poss?

Yes, don’t chop and change. You pay a transaction charge to buy and sell, plus the unit selling price will be lower than the unit buying price. Just pick 3-4 main funds or trackers, split your money evenly amongst them and leave it.

I would suggest starting with

25% in US tracker,
25% in UK smaller companies managed fund,
25% in FTSE 100 tracker,
25% in EU managed fund.

Pick funds which have low % annual fees eg Tracker funds should have annual % fee of less than 0.2%, managed funds less than 1%.

HL have a top 150 fund list they rate, look through these as a starting point.

NB Do be aware that we’ve nearly had a 10 year bull run (rising market), so the odds of it continuing without a correction at some point is pretty slim.

great advice thanks.

NB Do be aware that we’ve nearly had a 10 year bull run (rising market), so the odds of it continuing without a correction at some point is pretty slim.

its alright being aware of that, but ive no idea what to do about it! 😀

would that alter my thoughts on what youve advised to split? ^^^

if what you mean is that investments worldwide may be about to take a hit, then would it be a hit across the board, or would some of those 4 investments you list come out of it better than others?

Sadx we are due a correction so usually its across the board. Dont whatever u do crystalise your loss as some do, just keep reinvesting dividends. Best investment period is post crash. Just be brave, its like flying just after an air disaster, generally the safest time to fly.

Good luck, stay diversified

if what you mean is that investments worldwide may be about to take a hit, then would it be a hit across the board, or would some of those 4 investments you list come out of it better than others?

No one knows when, where or how…

Good luck, stay diversified

+1

25% in US tracker,
25% in UK smaller companies managed fund,
25% in FTSE 100 tracker,
25% in EU managed fund.

Or 20% for each of these and add 20% Emerging Markets ( China, India, Taiwan, Korea, South America etc).

i know theres no crystal ball, but how much does stuff like brexit and trump as president affect things like US and UK pension investments? a lot? hardly anything?

them and leave it.

This.

Terry Smith in the Telegraph

i know theres no crystal ball, but how much does stuff like brexit and trump as president affect things like US and UK pension investments? a lot? hardly anything?

Trump not much so far.

Brexit hasn’t happened yet. Won’t be good for the UK full stop, somewhere between not much and kicking off the next financial crisis….

o-kaaaaay…… laid in bed this morning thinking about pensions as you do……

looks like i sort of know where im going with mine now, and got me thinking bout mrs ex-p with no pension. worked for the co-op for 20 years or so with no pension, just started a company pension a few weeks before leaving to go self-employed so in effect shes got nowt. well, apart from shares in mine of course 🙂

am i right in thinking that at present, if i die, she gets 50% of my DB pension and all of the DC/SIPP jobbie as thats an invested pot that passes to wife/kids etc?
and if divorced i assume ex wives take 50% of any pension too? so in effect whatever happens, she does have a pension?

now as i said, shes self-employed (part-time, maybe 15-20hrs p/w at £10 p/h) so if she was to start a SIPP or something shes not getting anyone else to match payments and the only plus is its tax-free but isnt that also the case with ISAs and the like?

so, spose im asking if theres any real worth in her starting something going now? btw shes 10 years younger at 43, so a bit more time to pay into one, altho i spose if we did end up abroad she’d obviously be packing in work when i do.

also wondering that if she did, are there any pluses/minuses in either doing her own thing or ‘passing some money over to me’ to bump mine up? cant see any real benefit to that but its worth asking the experts 🙂

thanks

shes self-employed (part-time, maybe 15-20hrs p/w at £10 p/h) so if she was to start a SIPP or something shes not getting anyone else to match payments and the only plus is its tax-free but isnt that also the case with ISAs and the like?

Pension is tax free on the way in, isa tax free on the way out. For a high rate tax payer that usually makes a pension the best option, especially if an employer is chipping in. It sounds like your wife isn’t paying tax on those wages. Couple that with no employer contributions then a pension is much less beneficial. An isa may well be a better option. It also acts like an insurance policy to a self employed person. You can pay in more than you would pay into a pension because you can dip into it and take some out at any time should you need it in lean times or in an emergency.

You’re getting close to ‘overthinking’ this.

Earlier post of mine ^^^ advised contacting your pension providers to confirm status of dependants; you should for clarity and for any IFA discussions.

In divorce transfer value of pension is taken into account but divvying ups either by agreement or imposed by judge.

Sadx listen to more or less r4 podcast re trump, v little substance behind his claims. Guys a showman.

Re yr wife make sure shes maxed out her state entitlement and bought back her gap years. Its far better value than any private non employer subsidised pension.

The 3.6k pension contribution pa will cost her 2.8k with tax relief even if she has zero income. Its an 800 gbp gift from the govt so take it. Not sure if it can be backdated.

I m just going through my pension entitlements now, surprised noone on here is talking about how retirement income you need. I m aiming to achieve national avg uk salary, c 27k.

I m aiming to achieve national avg uk salary, c 27k

Which is a very tidy sum however people often overestimate how much they will need. Your outgoings will decrease as hopefully your mortgage will be paid off, you will likely only need 1 car as oppose to 2 and your “work” costs including commuting will be zero.

I m just going through my pension entitlements now, surprised noone on here is talking about how retirement income you need. I m aiming to achieve national avg uk salary, c 27k.

It is that just for you or as part of a couyples income? I’m looking at roughly the same figure 2 of us, which going by current spending will be more than enough. But that’s without starting to dip into investment capital.

surprised noone on here is talking about how retirement income you need.

All depends on what lifestyle you want!

In most cases, however, it will be a case of this is how much money we have, so we best live within our means…

You’re getting close to ‘overthinking’ this.

true dat! 😀

Earlier post of mine ^^^ advised contacting your pension providers to confirm status of dependants; you should for clarity and for any IFA discussions.

will do. pretty sure i read on the DB statements about 50%. that IFA chappy said thats normal, and when she goes thats it, nothing for kids etc. and that as the DCs are a finite pot, its my pot and just goes to dependants.

Re yr wife make sure shes maxed out her state entitlement and bought back her gap years. Its far better value than any private non employer subsidised pension.

not entirely understanding this, but do you mean make sure shes paid whatver NI contributions she should have otherwise she wont get full state pension? if so again, shes always been in work and paid NI and is going to voluntary pay it as self-employed now. does she need to send off one of those BR19 forms to see if shes paid all she can?

The 3.6k pension contribution pa will cost her 2.8k with tax relief even if she has zero income. Its an 800 gbp gift from the govt so take it. Not sure if it can be backdated.

again, are we talking NI here? and not sure what you mean about costing her £2.8k if she has no income…..

and not sure what you mean about costing her £2.8k if she has no income…..

HMRC still gives you some tax relief even though you don’t pay tax!

If you don’t pay Income Tax

You still automatically get tax relief at 20% on the first £2,880 you pay into a pension each tax year (6 April to 5 April) if both of the following apply to you:

you don’t pay Income Tax, for example because you’re on a low income
your pension provider claims tax relief for you at a rate of 20% (relief at source)

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

thanks.

been talking to my current DB provider who say it may be possible to transfer the £80,000 DC pot into this scheme and to send em transfer values if i want a quote. before i look into whether it is actually possible, does this sound a good idea or not? diversity, spread options over DC and DB etc on the one hand vs ‘DB are better pensions so worth looking into’ on the other……

I m banking on 27k pa for me as thats the natl avg salary. I fess up that i preinvested in btl so get it now, so can reinvest the income till i need it.

Sadx – yr wife should qualify for the lower rate ni contributions for pensionble years if she is working, is it 3 quid a week, i have to pay the higher rate but its still good value.

Your query re tax uplift on non income earner was answered, not sure if you can backdate it. If you can and can afford it do it.

Sorry i missed yr query re the gap years. If she gets a statement of her qualifying state pensionable years, it will show any gap years and what price she can buy them at. The rate has c doubled over the 10 years i ve been doing it. If poss buy any gap years back if you can.

back from hols now and ready to get cracking with this now, but may just need a bit of hand-holding to get me underway and make sure i dont make an early booboo.

im keeping my DBs and transferring my various DC pots into a HL SIPP as recommended. im on the HL SIPP application page and want to make sure i press the right button, as both buttons would seem to apply….

im guessing id click ‘transfer an existing pension to a SIPP’ rather than just ‘start a SIPP now’, that right?

and if i do that it takes me to an application form to apply for a Vantage SIPP. is that the one i want to be going for?

thanks.

Bumpity bump for the finance crew…..

im guessing id click ‘transfer an existing pension to a SIPP’ rather than just ‘start a SIPP now’, that right?

and if i do that it takes me to an application form to apply for a Vantage SIPP. is that the one i want to be going for?

Yes and Yes.
If in doubt give HL a call. They’re very good on the phone.

thank you very much. thought id be able to apply online, but looks like i print it off and send it. ill do that tomorrow.

thanks again.

okay, had the state pension forecast back……

if i carry on contributing NI til im 67 ill get £159.55 per week (£696 pm, £8325 pa)

it also explains about contracting out and says if i hadnt contracted out id have had a further £71 per week (so roughly £3600), so in effect by contracting out, im only eligible for 2/3rds what i could have had.

so…… now looking at my ‘contracted out’ pot, the DC pot with aviva….

2. an aviva DC pension made up from government payments when i opted out of SERPS, not doing too bad (4%?). current value £34,000

…… i spose im now comparing £71 per week for life, starting from age 67, against a pot of £34,000 to do with as i wish yes?

so in rough figures ive lost £3600 pa and have £34000 to show for it, which like for like would only last me 9 years, til age 76. doesnt seem such a good move when i look at it like that.

would you agree? are my sums out or am i missing some other considerations?

would you agree? are my sums out or am i missing some other considerations?

Yes, doesn’t look like good value. Can you buy back in?

Only problem with state pension, is we have no idea what it will be when we retire. You could buy back in and then find they have to slash state pensions by 25% to pay for Brexit…..

Yes, doesn’t look like good value. Can you buy back in?

i dont believe so, although i will ask further….

ive just been googling away, reading that some may be able to top up, but i created one of those ‘gateway’ accounts which gives me access to my personal details, much the same as the statement ive just had through the post. where it shows the figures stated above it says…

£159.55 is the most you can get

You cannot improve your forecast any further, unless you choose to put off claiming.

just been onto the pensions helpline, and as feared, i cant improve the pension by buying back NI years, so it is what it is. he also stated that im currently contracted out as im with the fire service. public servants, fire, police, teachers etc are contracted out and pay lower NI. that surprised me as id then expect to have another personal pension running now, but he said its all built into the statements i receive each year.

didnt understand that at all, bit confusing really but i spose the bottom line is he says i cant do owt about it so thats that.

im currently waiting on the fire pension bods to get back to me to confirm or deny whether i can move the 4 DC pension pots into this fire DB pension. ive got all the paperwork ready to go to stick the pots into a HL SIPP, but just holding back until fire say i can or cant. if i cant then off the paperwork goes to start the SIPP, if i can, then i have to look deeper into which is the best option, invested in a HL SIPP or invested in my current fire pension.

would you agree im following the correct course of action?

whether i can move the 4 DC pension pots into this fire DB pension.

I would go for HL myself.

If the Fire service decide to cut the benefits of the DB pension you will loose out on everything. Diversity is key. Just look at the current Postal Workers dispute over their DB scheme etc.

I’ve already had a big cut to one Final Salary scheme when the employer went bust…

right, so me thinking ‘DB DB DB, DB is best, keep the DB, stick what you can in a DB, DC is cr@p’ isnt necessarily correct then 😀

a HL SIPP with £80,000 spread out over various markets may be better than £80,000 put into a DB pension yep?

right, so me thinking ‘DB DB DB, DB is best, keep the DB, stick what you can in a DB, DC is cr@p’ isnt necessarily correct then

DB is best, but when you put money into a DB as an AVC (Additional Voluntary Contribution) you don’t normally buy the same rights as you get from your years service. Eg when my DB pension went bust and entered the Pension protection fund, all AVCs were wiped out completely, after which they then cut the DB bit by 10% and removed index linking from contribution before a certain date (which meant I lost pretty much all the benefits of a DB scheme).

a HL SIPP with £80,000 spread out over various markets may be better than £80,000 put into a DB pension yep?

Complicated issue. It all depends on how they treat your AVC ie what does it buy you. If they just treat it as cash then it’s down to how well the two funds do over the next x years (which is anyone’s guess). I would expect a DB scheme to invest conservatively, so you might do better with HL and a more aggressive investment strategy. However, if we get a big crash then aggressive investments will take a bigger hit.

In this scenario I would say Diversity (don’t put all your eggs in one basket), would be the main guiding principle.

didnt know AVCs were any different from any other form of pension, so that surprises me altho im a bit confused as to why you mention the AVCs? my 4 pots are roughly £76,000 say in normal company DC pensions and only 2 X £2000 DC pots from AVCs. so the bulk of my £80,000 isnt anything to do with AVCs.

also once invested elsewhere, do they not cease to become AVCs? is it not all amalgamated into one £80,000 pot either plopped into a SIPP or into a DB pension?

In this scenario I would say Diversity (don’t put all your eggs in one basket), would be the main guiding principle.

ok, ill lean towards the SIPP, altho ill still wait a week to hear back whether i do indeed have a choice, i think itd be foolish to close that door without at least having a butchers at what my options would be 🙂

thanks

didnt know AVCs were any different from any other form of pension, so that surprises me altho im a bit confused as to why you mention the AVCs

With a Defined Benefit pension you accrue entitlement based on years service, often 1/60 final salary for each year’s service.

When you transfer cash into a DB pension scheme it’s normally known as an Additional Voluntary Contribution (AVC). What this buys you in terms of benefit will be down to the rules of that scheme.

I would guess they don’t buy years service, but just get added to the total pot and grow with that.

okaaaaay, had word back from fire pension about how much my old pensions would get me……

as ever, its more complicated than it need be, as theyve quoted me for 2 of my different roles within the service, but they roughly seem to be the same so here goes…..

right, my current DB pension is what it is, so theres nowt i can do about that, this is the 4 previous pots, that add up to about £80,000 that im lining up for a HL SIPP.

combining the 4 pots and rounding everything up, the £80,000 pot is worth about 6 years service, for which they give an estimated monetary value of £3418 per year.

so i have a choice of ‘invest £80,000 in a SIPP’ and add to my current DB on retirement, or ‘no SIPP but receive an extra £3418 per annum’.

obviously i cant expect official financial advice here, but id be interested in whether you think one is far better than the other?

as footflaps (and others) have mentioned, diversity is the key, but does my diverse SIPP investment look to be worth around the same, or better than, an ‘all eggs in one basket DB pension’?

thanks

With your SIPP, you can leave it invested unti you need it post retirement, so will continue to grow. £3400//yr for 80k sounds about right.

Sadx – why were you not allowed to buy back any qualifying gap years from the state? Or do you not have any gaps? I thought you could go back 7 years.

Can you buy any additional years from your employer?

I am keeping my pension pot in a mix of db, avc, state, property. It may underperform but if any of them go pear shaped i am covered.

Can you buy any additional years from your employer?

Normally you can’t, but every scheme is different.

With your SIPP, you can leave it invested unti you need it post retirement, so will continue to grow. £3400//yr for 80k sounds about right.

thanks. but i spose if i chuck the £80,000 into the current DB itd still be growing too wouldnt it? so all the way til the pension ends at 60 itd be much of a muchness?

Sadx – why were you not allowed to buy back any qualifying gap years from the state? Or do you not have any gaps? I thought you could go back 7 years.

the only gaps are from when i contracted out, for which i have a separate pot now in its place. i rang them up to ask, he went round the houses a bit with the whys and wherefores, i didnt really understand what he was saying, so i just said “can i or cant i?”, the answer was no, there is no option for me to buy back.

Can you buy any additional years from your employer?

if you mean my old employer, theyve ceased as a company now. if you mean my present company (fire service) then they dont do AVCs. is that what you mean?

I am keeping my pension pot in a mix of db, avc, state, property. It may underperform but if any of them go pear shaped i am covered.

so as the £80,000 seems to be a fair equal to the proposed £3400pa, would you recommend the SIPP instead to give more variation?

or is this the point i ought to pay for an IFA?

i tried to work out the difference in my head. if i were to invest £80,000 and take out £3400pa, then itd last me around 23 years. obviously the SIPP would probably be greater than that by then, but you get what i mean……

but if i were to live to a ripe old age, then the all-in DB option would be better. it really is a hmm ha hmm ha decision isnt it 🙂

EDIT: just another thought, how much would £80,000 get me if i just kept it invested and ‘creamed the top off it’? itd only be coppers really wouldnt it?

thanks. but i spose if i chuck the £80,000 into the current DB itd still be growing too wouldnt it? so all the way til the pension ends at 60 itd be much of a muchness?

yes, but you’d have all your eggs in one basket, so if the plan gets into trouble and falls into the Pension protection fund, AVCs will be wiped out.

I’d stick the £80k into a SIPP as you’re less likely to loose it all that way.