Well, F me…
3% every year?

as someone who had absolutely no idea of what to expect, i didnt question anything at this point. i did think to myself that 3% appeared to be well above the 1% that pension 1 was accruing, so where was my gain, but thought im probs being financially ignorant, and its ‘what they all charge’.

i maybe misheard/misunderstood, ill see what occurs on next visit.

If you are paying 3% fees, you need a 6% investment return just to keep up with inflation. My companynpension scheme charges are between 0.1% and 0.9% depending on funds.

My funds have risen by 15-20% per year for the last 3 years, so 1% is atrocious.

what the bloody hell do you invest in to get that return?? 😀

Sadx make sure you ve paid any gap years in your state pension entitlement if u have any. I pay voluntarily because i can and its a really good deal. Each year costs c 750 gbp. 4 to go and i m maxed out.

A load of guys I work with seem to be cashing in DB pensions for the SIPPs,I am holding off for now it would appear that the guy advising them has not told one yet to keep the cash where it is yet one colleague who has a relative in pensions has advised them to keep it where it is (DB). I personally cannot see the rush to transfer out (although the company is offering cash enhancements to transfer out).

matey explained the difference between DC and DB quite well, basically DB is paid for life, DC is a finite pot, invest it how you like and when its gone its gone.

Not exactly: with a DC pension, you can (and until recently, had to) buy an annuity which turns your finite pot of money into a guaranteed income for the rest of your life.

The real difference between DB and DC is that the amount that you get with a DB scheme is guaranteed: if you pay in X every month, when you retire you will get Y. i.e. the benefit you get is defined, and doesn’t depend on the performance of investments. If your employer’s pension fund performs badly, that’s their problem, not yours.

With DC you pay in, and what you get out depends on how well your investments perform between now and retirement. If your investments perform badly, you get a smaller pot at the end, and if you use it to buy an annuity, you get a smaller annual income.

Sadx make sure you ve paid any gap years in your state pension entitlement if u have any.

no gap years mate, have been permanently employed since school. he did say id probably get a reduced state pension due to contracting out for a period and id need to fill in a B19 form or something to find out what my entitlement would be,

it would appear that the guy advising them has not told one yet to keep the cash where it is yet one colleague who has a relative in pensions has advised them to keep it where it is (DB).

ah that reminds me, he did say that theyre giving bumper transfer values at the moment for DB because they want you to transfer out cos itll be cheaper for them in the long run.

pdw, thanks for that. yeah he did explain it like that, its just id shortened it.

ive emailed him asking for a proper breakdown of his fees.

Surely it was 0.3%

wise STW’ers, what’s the situation with my wife – she worked after leaving school right up until my daughter was born so has paid her NI up to that point.

She was then on maternity leave, and didn’t return to the labour pool until the kids went off to school so has a few years where she was a stay at home mum.

I believe that women have an allowance so a ‘full’ set of years isn’t as long as for a man? Is this right or did it go with equality. And how do we find out how many years she’s short and how to make them up?

SadexP – my funds are a mix of US equities and Emerging markets, with a bit also in U.K./global tracker funds.

The top one is my biggest fund.

as someone who had absolutely no idea of what to expect, i didnt question anything at this point. i did think to myself that 3% appeared to be well above the 1% that pension 1 was accruing, so where was my gain, but thought im probs being financially ignorant, and its ‘what they all charge’.

Not that surprising, before Stakeholder pensions, fees for company pensions weren’t capped, so you can have a fee of several %. As you’ve left the company, no one is managing or looking out for your pension so they just let in languish in an underperforming fund, creaming off the management percentage each year. Totally immoral, but fairly standard practice.

Stakeholder pensions are capped at 1% (after the first year, which is capped at 1.5%).

dan, cant see that pic, think its the photobucket changes that mean you cant show pics unless you pay these days…..

btw, can you be my financial adviser please? 😉

Other jon – ask her to get a statement from ni. It will show the years accrued at nil cost child rearing, caring or studying. Check they are correct as they messed up mine on several occasions and keep the paper statement as proof.

Then buy back any years she can, its far cheaper buying these years than any other product. I ve been buying years voluntarily for 15 years now and the price has c doubled, so when i m maxed out its all paid for.

what the bloody hell do you invest in to get that return??

Over the past few years, just about anything!

https://www2.trustnet.com/Investments/SectorPerf.aspx?univ=O&SP_sortedColumn=PerformanceCurPerf.P1m&SP_sortedDirection=DESC

click on a sector name and it will show you what the best/ worst performing funds have been making over each timescale. It may open your eyes…

just had mateys t&c’s…..

its 3% of funds invested as an initial charge, then 1% of funds invested as a rolling charge annually. does that sound reasonable? got to say, its not an unsubstantial figure when i add it up, it seems tempting to have a bash meself to try and better my old pension than have to pay all of what its currently doing each year to someone else. but….. they may save me thousands more than they cost, so hmm ha hmm ha *strokes chin thoughtfully

That’s a pretty standard charging structure I think, certainly nothing out of the ordinary.

its 3% of funds invested as an initial charge, then 1% of funds invested as a rolling charge annually. does that sound reasonable?

What do you get for that in terms of advice?

Just one session at the start? Regular reviews?

Is the 1% annual charge on top of the platform fees / fund fees? If so, you’ll be paying about 2-2.5% per annum, so with inflation at say 3%, you’d need to make 5-6% just to keep the fund’s value. The 1% rolling charge is the expensive bit as you’re paying it year on year.

got to say, its not an unsubstantial figure when i add it up, it seems tempting to have a bash meself to try and better my old pension than have to pay all of what its currently doing each year to someone else. but.

Have a bash. It’s not rocket surgery. Invest in varied tracker funds and you can’t go far wrong. Read the weekend papers’ money sections, monevator.com etc, and you’ll soon get a grasp of things.

What returns have your pensions been making?

If you meet the eligibility criteria applied by DC pension funds and are able to withdraw cash, you will be taxed on an emergency code which then means you need to sort with HMRC at or before tax year end.

If your DB scheme – item 3 on your list – has a transfer value >£30k you will not be allowed, by law, to transfer out unless you have taken advice from an IFA with the required specialist experience (the majority don’t have this) AND the advice from the IFA is that a transfer out is appropriate for your circumstances. The pension provider will not make a transfer unless these criteria have been met.
Doesn’t matter what you want – if their advice is ‘no’ you either swallow it or find one who will be more amenable.

If you are able to transfer this ^^^ DB pension into a SIPP, be aware that any cash withdrawal from the SIPP is not tax-free.
So, transfer into SIPP with fund totally invested; decide you want to withdraw some cash – say £5k net; tax efficient way is to transfer £20k into a different a/c within the same investment wrapper and then withdraw the 25% tax free sum you are allowed which will give you £5k.

If you’re serious, I suggest you search IFAs in your area and then arrange to meet (say) 3 to discuss your aims and objectives; they will all give you an initial consultation free – they won’t get into specifics but will want to understand your circumstances, your reasons, your financial status, attitude to financial risk. You get the chance to interrogate their experience, investment strategies – which wrappers/platforms, fee structures, performance reviews etc. Make sure you choose based on their experience, qualifications, client testimonials (check how recent they are), length of time in business – all available online but ask when you call to set-up free consultation.
You could use this a means of getting free advice and then freelancing but, remember, they won’t give much away in a free consultation.

There have been some good returns in recent years but relatively flat growth, political & economic uncertainty, currency volatility, Trump, Brexit, slowing demand in China will – I think – dampen returns for the 3-5 years.
I could be miles off the mark – and hope I am!

Pension planning is all about risk management. In your situation, to balance risk I would:

1. Keep the 2 defined benefits schemes. They are a known quantity, with guaranteed payouts. Add these to your state pension you have a reasonable back stop – Low risk guaranteed pension.

2. Set up an Online SIPP and transfer in your DC schemes. Initially they will go as cash until you decide which funds to invest in. Slightly riskier than the DB schemes, but no different to what they are already doing – and it sounds like their returns are rubbish.

Find a platform you like the look of, and can navigate easily, make sure the platform fees are low. Something like Hargreaves Lansdown (I dont know which platform is best, as I use my company scheme platform) . Trackers/passive funds have low charges, whereas actively managed will attract higher fees, hence needing better returns to beat the passive funds.

Obviously, I am not a FA, if you are not comfortable managing it yourself then pay an FA. As you have found though, this will cost you. With a (Theoretical) £100k pot, he will charge you £3k upfront plus £1k per year (probably £1500 with fund charges).

What do you get for that in terms of advice?

Just one session at the start? Regular reviews?
looks like its a yearly review….

Once a year, around the anniversary of your plan being implemented, we will send you a report. This
report will be structured to complement the report we have previously provided and will also contain
recommendations for the next period. A typical recommendation could include maximising your ISA
allowance (if sufficient funds are available) or drawing money from your investments in the most tax
efficient manner.
In order to generate this report, we will need you to inform us of any changes in your personal
circumstances, including any new or changed financial goals. We will use this information, along with
details of your investments, to generate any new recommendations.
You are always able to speak to a Flying Colours financial adviser to discuss any queries you may have
regarding the recommendations in your report.
Our Annual Fee
If you agree to engage our Ongoing Advisory Services, we will charge you an ongoing fee. This fee is 1% with a minimum
of £499 pa.

What returns have your pensions been making?

not sure how to glean this info from the statements, ill have another look and see if anythings obvious. from memory of our conversation, the ‘pension 1’ returns 1% and ‘pension 2’, the SERPSy bit is doing 4% with aviva which he said was quite good. not sure bout the others…..

If your DB scheme – item 3 on your list – has a transfer value >£30k you will not be allowed, by law, to transfer out unless you have taken advice from an IFA

not sure how much the transfer value of that is, am i right in thinking i have to contact the company for that info as its not on the statement, only a ‘yearly pension’ value?

this leads me to another question. i think i read somewhere you can ask for a valuation, and you have to act on it within 3 months or its not valid any more, but you can only have one per year. if matey asks for those values himself, and then says “i have the values, i have a plan, pay up and we’ll get everything in motion” and i then decide nahhh ill have a bash meself, would i have to wait another year to get them myself?

gut feeling now is ill end up doing it myself, i dont like those yearly payouts to someone else. is it a good idea to put my values up here for perusal, or should that be confidential? cant see it gives any sensitive info away, and youd have an opportunity to laugh at how poor ill be when i retire 😀

thanks for the substantial and informative posts frank and dan, ill have a good read of those now…..

not sure how much the transfer value of that is, am i right in thinking i have to contact the company for that info as its not on the statement, only a ‘yearly pension’ value?

Yes, you normally have to ask for a transfer value, but you don’t need an IFA for that, just phone them up or write to them.

this leads me to another question. i think i read somewhere you can ask for a valuation, and you have to act on it within 3 months or its not valid any more

Quite possibly, could depend on the scheme. But you should be able to see different IFAs within the 3 months.

gut feeling now is ill end up doing it myself, i dont like those yearly payouts to someone else.

I agree, loads of useful info in the public domain. Sunday broadsheets are full of pension advice / info in their Money sections (Sunday Times, Sunday Telegraph).

is it a good idea to put my values up here for perusal, or should that be confidential? cant see it gives any sensitive info away, and youd have an opportunity to laugh at how poor ill be when i retire

Yes and no, yes you get good advice on here from several different people. On the other hand, if you are identifiable from your email address etc (in profile), you’re basically advertising how much money you have for someone to try and con you out of.

Yes and no, yes you get good advice on here from several different people. On the other hand, if you are identifiable from your email address etc (in profile), you’re basically advertising how much money you have for someone to try and con you out of.

lets go for it then, im only a humble working class bod 🙂 theres always someone out to scam you however much youve got and i think im cynical enough not to fall for owt daft. hey, im even trying to not pay an IFA who may be able to make me money! 😀

1. an underperforming DC engineering pension (1%) from my first job, changed hands a few times and currently with zurich, bout 7 years of payments. current value £43,000

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

3. a DB pension from engineering job no 2, 10 years worth of payments doing nowt special. unknown value, says it should pay £5,400 per annum

4. a small friends life/provident pot from some AVCs at the time of pension 3. current value £2000

5. a small scottish widows DC pot from when engineering job no2 stopped DB and started new DC pension. had it a year then left for current job. current value £2500

6. current DB firefighters pension, not much i can change with that, if i retire at 60 itll be nowt to get excited about. again, unknown value and current projection at 60 is £9400 per year, or lump sum £28,200 and £7,000 p.a.

think all of them are proposed to run til im 65 (12 years time) except the FF pension which knocks off 5 years earlier.

interested on opinions and advice. obviously im not expecting proper IFA advice on here, just generic ‘thats a bit sh1t, id shift it/thats not bad id keep it’ etc, bit like dans post ^^^

thanks chaps

EDIT: just to confuse me a bit more, Pension 1 have written to me with a transfer value and the bumph says ‘holding value – £28,000 and transfer value – £43,000’. does that mean its only worth that if i move it, keep it where it is its only worth £28,000?

the next page states ‘weve estimated when you retire, non-protected rights worth the equivalent of £24,000 today’ and a yearly pension of £531
former protected rights worth equivalent £17,000, equivalent to yearly income of £392.

those figures are dire arent they? id really only get £800ish per year from my first engineering pension? a significant part of my working life?

those figures are dire arent they?

No really.

You get £8k / year state pension and your two DB will give you £5,400 and £9,400, so that’s a pension of £22,800, which isn’t bad at all ( a lot more than most). The DB will both be index linked, so will rise with inflation (need to see the details for whether its RPI and if the % is capped etc).

You’ve then got £80k ish in DC pension on top of that, which you could use for paying one off items eg new boiler, new car etc during retirement (via a draw down scheme).

Hopefully you’ll have paid off the mortgage by the time you retire, so your running costs reduce. You also won’t be saving into a pension etc, so your annual burn rate will be less.

To put it in context the average UK pension pot is something like £50k total. So you’re well above average.

My advice would be:

1. Leave DB alone
2. Move all DC into one fund, eg with HL, and invest in a mix of three trackers eg US, UK and EU.

Current annuity rates (at 65) are roughly £3-£5k/year per £100k invested (depending on whether joint and the % increase). So to buy your DB would cost at least £300k, probably more as I bet those DB also have a 50% pension for you wife if you die first and are index linked at RPI (my DB pension is).

DB schemes will provide a free transfer value once in a one or two year period.
If you ask for another they will charge – between about £200 & £500.
Any transfer value they provide is valid for 3 months only.

Annuity rates are currently very poor due to historically low bond/gilt rates. This means “pension predictions ” from DC pots sound really poor. Drawdown should allow 4% per year from your pension pot, so £3.5k pa on top of your DB pensions. Could you live on £26k per year in retirement?

My plan is to take the maximum tax free lump sum from my pot, then use it to top up my RAF pension/state pension to just under the Higher Rate tax band.

Sadex 23k pension is far more than most. On the r4 retirement podcasts this summer i m sure i heard 70% current pensioners rely on the state pension alone.

I d start thinking about what sort of lifestyle you want to enjoy when you retire. Base living costs of say 5k, food drink etc, the luxuries like travel. I think a luxury retirement lifestyle was priced at 39k pa but it did include a lot of expensive holidays.

My advice would be:

1. Leave DB alone
2. Move all DC into one fund, eg with HL, and invest in a mix of three trackers eg US, UK and EU.
seems sensible to leave the DBs as DBs then. so not even worth thinking about merging DBs, transferring a DB to a better performing DB no?
and by moving all the DCs into an HL fund……. how does one go about doing that? open a HL account, then contact all providers to say please transfer the pension into this HL fund please? so then i have an HL balance of £80,000 which i play about with online? move stuff about as and when i like? how much would HL charge for using them? and is there a difference between paying HL to invest, or putting the £80,000 in my bank and investing from there? is it a tax thing? sorry for the probably dumb questions, the answers will all make me understand investing better 🙂

Current annuity rates (at 65) are roughly £3-£5k/year per £100k invested (depending on whether joint and the % increase). So to buy your DB would cost at least £300k, probably more as I bet those DB also have a 50% pension for you wife if you die first and are index linked at RPI (my DB pension is).

im sure i read somewhere about 50% to spouse, yes. and am i right in thinking annuity rates are what i mentioned in my last post, around £800 per year for mine that i thought was crap? so why am i getting quotes of £800 p/a on my £80,000 when you say ‘roughly £3-£5k/year per £100k’?

DB schemes will provide a free transfer value once in a one or two year period.
If you ask for another they will charge – between about £200 & £500.
Any transfer value they provide is valid for 3 months only.

so 3 months to transfer a DB or forget about it for a year, and transfer whenever i like with a DC yep?

Drawdown should allow 4% per year from your pension pot, so £3.5k pa on top of your DB pensions. Could you live on £26k per year in retirement?

yes, we could live on £26k, but thatd only be from age 67 or 68 wouldnt it? i started looking at all this pension malarkey to see if theres any viability in retiring at 60. i dont think id be able to would i?

dont really understand drawdown, IFA mentioned it in our meeting but i didnt quite get it. i think im right in understanding my DBs will get me £15,000 pa, are we saying my £80,000 pot, invested with HL say, and using ‘drawdown’, should give me a return of another £3.5k per year? and is that £3.5k just taking the ‘interest’ each year if you like, and my pot would always stay at £80,000, or would it be depleting all the time? again, sorry if im asking the obvious, its just not obvious to me yet 😀

I d start thinking about what sort of lifestyle you want to enjoy when you retire. Base living costs of say 5k, food drink etc, the luxuries like travel.

my ideal scenario would be to retire abroad at 60, when current DB starts paying out. as mentioned above, i dont think id be able to would i? DB2 (current) starts paying £9000 pa at 60, but DB1 i dont think starts paying another £5400 until im 65. and my £80,000 DC pot would get me £3.5k (invested with HL) starting at 65 too wouldnt it? i cant transfer that to HL now and start taking it at 60 can i?

thanks for all the info chaps, im trying to take it all in and process it all 🙂

just don’t fiddle with the defined benefits pensions. They are ‘money in the bank’. Unless the fund goes belly up. and even then there are safeguards.

so not even worth thinking about merging DBs, transferring a DB to a better performing DB no?

You can’t do this. Each DB is different in terms T&Cs and they don’t accept transfers in, just cash transfers out into DC.

. how does one go about doing that? open a HL account, then contact all providers to say please transfer the pension into this HL fund please?

Very simple. You open a SIPP with, say HL (I use them and it’s a good platform). You then download the transfer form, from HL, fill in the details of your other DC pensions and post the form back to HL. They then contact the other pension companies and arrange the transfer for you (you never see the money, it just moves from one pension to the other). The DC pension company might contact you to ask if you’re happy with any exit penalties. Generally very simple, I’ve moved several (mine and my wifes) this way.

so then i have an HL balance of £80,000 which i play about with online? move stuff about as and when i like?

Yep. That simple.

how much would HL charge for using them?

The fees break down in several ways. They charge an annual percentage for having a SIPP (less than 0.5% off top of my head). When you buy into an investment fund they charge a transaction fee (tiny). The fund will have an annual management fee (say 1%), but HL generally get a discount, so it becomes say 0.7%. Thus the total annual fee is 0.5% HL fee + 0.7% fund fee = 1.2% (as an example).

and is there a difference between paying HL to invest, or putting the £80,000 in my bank and investing from there?

You can’t put the money in a bank account as it’s a pension fund. You could open a SIPP with a bank and do the same, but banks are notoriously expensive for this sort of thing.

is it a tax thing?

Yes, a pension is a tax protected vehicle and has strict rules about how you access the money. Up until your nominal retirement age less 10 years, you can’t touch it. At Retirement – 10 (normally 55) you can take 25% tax free as a lump sum. At retirement age (normally 65) you have various options for how to access the fund, some are tax efficient (eg annuity), some are not (take the cash).

I would expect the options to have changed a bit by the time you can retire, we had a major change only recently and they’ll probably tighten the rules a bit to stop people being stupid / being ripped off.

dont really understand drawdown, IFA mentioned it in our meeting but i didnt quite get it.

Drawdown means you leave the money invested in the stock market after you retire. The fund may go, it may go down, all depends on the market.

You then decide how much and how often you withdraw money from the fund. The more you take out, the less there is left in. Take too much out too regularly and the fund will run out and you’ll be left with nought and still alive. Take too little and your children might get an inheritance, but you could have had a nicer retirement.

People quote a figure of 4% as being the upper end of what you can withdraw each year and keep the fund going indefinitely. So with £80k you might be able to take £3.2k each year from the £80k. If the markets crash and the fund halves, this will drop to say £1.6k, so it’s not guaranteed….

my ideal scenario would be to retire abroad at 60, when current DB starts paying out.

You won’t have the state pension, just the one DB, so not a lot of money.

and my £80,000 DC pot would get me £3.5k (invested with HL) starting at 65 too wouldnt it? i cant transfer that to HL now and start taking it at 60 can i?

You can definitely take 25% tax free at 55. I don’t think you can touch the rest till you’re 65 (might be wrong about that).

At retirement age (normally 65) you have various options for how to access the fund, some are tax efficient (eg annuity), some are not (take the cash).

Is that right? I’m pretty sure you can take the 25% at 55 and then start to take money via drawdown or but an annuity. If you can’t access the 75% until 65 then my retiring at 55 plans are ******

Is that right? I’m pretty sure you can take the 25% at 55 and then start to take money via drawdown or but an annuity. If you can’t access the 75% until 65 then my retiring at 55 plans are ******

I could be wrong, I’m only 46 so not looked at that in detail yet, plus the rules will have changed by the time I get there…

EDIT: Looks like it changed last year and you can now access the other 75% from 55, still only withdraw 25% tax free though.

At any time after the SIPP holder reaches early retirement age (55 from April 2010) they may elect to take a pension from some or all of their fund. After taking up to 25% as a tax-free Pension Commencement Lump Sum, the remaining money can either be moved into ‘drawdown’ (where it remains invested) or used to purchase an annuity. Drawdown income may be “capped”, typically limited to that obtainable with an annuity according to the Government Actuary’s Department (GAD). This is reviewed every 3 years until age 75 and annually thereafter. This limit does not apply to plan holders in “Flexi Access Drawdown”, who may take any amount from their fund from age 55. Pension income is taxed as if it is earned income at the member’s highest marginal rate.[8]

Rules exist to prevent the Pension Commencement Lump Sum being recycled back into the SIPP (and neither drawdown nor annuity payments count as earned income for the purpose of making SIPP contributions).

If the fund value exceeds the Lifetime Allowance, the amount above the lifetime allowance will be taxed at 55%. The lifetime allowance was £1.8 million in the 2010-11 and 2011-12 tax years. From April 2012 the Lifetime Allowance fell to £1.5 million but there are provisions for those previously relying on the higher limit. In the Chancellor’s 2012 Autumn Statement, it was confirmed that the Lifetime Allowance would fall further, to £1.25 million from 6 April 2014[6] (again with the option of certain individuals being able to claim the previous level of Lifetime Allowance). In March 2015, a further reduction to £1 million was announced from 6th April 2016, with the allowance to be adjusted for inflation, based on the consumer price index, starting in 2018.[9]

https://en.wikipedia.org/wiki/Self-invested_personal_pension#Tax_treatment

From the pensions advisory service website. I’ve never read anything that says you can’t access the rest of your fund until you’re 55.

I’m 50, its important 🙂

Taking money from your pension

Whether you have a defined benefit or defined contribution pension scheme, you can normally start taking money from the age of 55. You could use this to help top up your salary if you are still working, to enable you to work fewer hours or to retire early. You may also be able to release a cash sum from your pension too.

If you’re a member of a workplace pension scheme, you generally require the consent of the employer or ex-employer to take benefits early. In some instances, you may also need the consent of the pension scheme trustees.

If you have a private pension, you don’t need the consent of an employer or the pension provider to take benefits early, if the terms and conditions of your contract allow you to do this.

To be fair it’s very difficult to find clear information on drawdown. There’s a lot of ‘you may be able to’

excellent info guys, much appreciated, in fact very much appreciated.

Each DB is different in terms T&Cs and they don’t accept transfers in, just cash transfers out into DC.

im sure my current firefighter DB pension will allow me to transfer DC into it, as i looked into it a good few years ago and was told it would buy me so many years and days. does that sound right? and if so would it be worth looking into again to bump up my current DB instead of a SIPP?

The DC pension company might contact you to ask if you’re happy with any exit penalties. Generally very simple, I’ve moved several (mine and my wifes) this way.

ahhh exit penalties, forgot about those. are my current DC jobbies likely to have such steep penalties as to make it not worthwhile putting into a SIPP?
and is it just a case of ringing the company and asking them?

Thus the total annual fee is 0.5% HL fee + 0.7% fund fee = 1.2% (as an example).

so a higher rate than these current IFA bods would charge to manage my money for me?

Drawdown means you leave the money invested in the stock market after you retire. The fund may go, it may go down, all depends on the market.

im not sure whether pensions are invested in stocks and shares anyway, so not sure of the context of that statement. do you mean ‘move the pension from HL into stocks and shares instead and play with it’ or ‘just leave the pension with HL (who invest in stocks and shares anyway) at retirement age and play about with it’?

You won’t have the state pension, just the one DB, so not a lot of money.

aye, not a fat sight to live on is it 😀 ok, state pensions fixed, will the other DB plus the £80,000 be accessible at any time from 55-65 then, but at lower figures, (so less than £80,000 as thats the projected figure at 65) not even sure if that makes sense reading it back, hope you understand what im getting at 😀

and if that statement makes sense, that current £80,000 (or less if early) DC pot…… i assume then at 55 i can access it, ‘cream’ the (hopefully) £3.5k per year from it for ever and ever if i so wish. but, if i havent been able to afford to retire yet, i may as well not cream it and let it build along with another 5 or 10 years of smallish gains per year and then when i do retire, the ‘cream’ will be larger?

just typed that lot in random order as ive been thinking about different questions, the last two may be asking the same thing or contradicting each other, im not sure, so please bear with me 😀

thanks

so a higher rate than these current IFA bods would charge to manage my money for me?

No, he will charge his 1% on top the fund fees. His fund fee discount probably won’t be as good as HL, so you have a larger wrapper / mgmt fee and a larger fund fee.

im not sure whether pensions are invested in stocks and shares anyway, so not sure of the context of that statement. do you mean ‘move the pension from HL into stocks and shares instead and play with it’ or ‘just leave the pension with HL (who invest in stocks and shares anyway) at retirement age and play about with it’?

A pension is a tax wrapper for a financial vehicle. The money inside the pension could be invested in cash, stocks and shares or bonds / guilts or a mix of all three.

Generally, best growth is had from stocks and shares, so the bulk of most pensions are invested there.

When you open a SIPP and transfer the DC schemes into it, initially the money is just held as cash and gets no interest, so doesn’t grow. You then pick funds and get HL to buy into those funds using the cash in your account. Hopefully those funds then grow. With drawdown, you decide you want to take some money out, so instruct HL to sell, say, £3k of stocks, which they then do and put £3k into your account. You then withdraw that £3k as cash…

and if that statement makes sense, that current £80,000 (or less if early) DC pot…… i assume then at 55 i can access it, ‘cream’ the (hopefully) £3.5k per year from it for ever and ever if i so wish. but, if i havent been able to afford to retire yet, i may as well not cream it and let it build along with another 5 or 10 years of smallish gains per year and then when i do retire, the ‘cream’ will be larger?

Yes, generally delay retirement if you can as you will accumulate more wealth and any annuities / DB schemes will give you a better rate as you are older, so probably won’t live so long.

The flip side, is you have to work longer.