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19 Feb 20, 06:08 PM |
#41
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Imagineer
Join Date: Oct 09
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As a DB pension is based upon salary and length of service, and it not directly investment based, you are unable to pay into it imho.
Disney332
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19 Feb 20, 06:09 PM |
#42
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Imagineer
Join Date: Mar 02
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19 Feb 20, 06:14 PM |
#43
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Imagineer
Join Date: Oct 09
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Yep, cannot see a problem with that, but might be worth seeing an IFA.
Also, if you retire on April 4th and start taking your pension in the following tax year, you will have £12,500 of tax free income to take Disney332
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19 Feb 20, 06:15 PM |
#44
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Imagineer
Join Date: Feb 13
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19 Feb 20, 06:18 PM |
#45
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Imagineer
Join Date: Mar 02
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19 Feb 20, 06:19 PM |
#46
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Imagineer
Join Date: Oct 09
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If you see an ifa you could also consider phased retirememt.
If you dont plan to spend the 25% tax free cash you can phase it out, so every pension payment is 25% tax free. This can be done over a number of years. Ifa will elaborate Disney332
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19 Feb 20, 06:22 PM |
#47
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Imagineer
Join Date: Mar 02
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The DC is to get me to September 2024 when I plan to take my DB pension. It should do it comfortably. There isn't a need to take a lump sum so spreading out the tax free portion may be the way to go, I'll still have a mortgage but the DB lump sum will comfortably take care of that.
Thanks for the responses. |
19 Feb 20, 06:24 PM |
#48
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Imagineer
Join Date: Oct 09
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Good luck, and hope you have a long and healthy retirement.
Never forget...your wealth is your health. Disney332
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19 Feb 20, 06:25 PM |
#49
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Imagineer
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Don't expect too much from Pension Wise. They can't advise only show you the options out there for you which I'd already found out on forums like MSE.
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19 Feb 20, 06:32 PM |
#50
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Imagineer
Join Date: Feb 13
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So the first thing to check is what is available from your current employer as regards additional contributions.
There are a number of things that impact the way forward - 1. Are you currently paying into your DB pension? Or like many employers - that have closed their DB scheme and are now paying into a company DC scheme? 2. Some occupational DB schemes also have an associated DC scheme running along side where you can make Additional Voluntary Contributions (AVCs)? Does your scheme allow this. 3. If not AVCs foes your company allow ant contributions to a DC scheme via Salary Sacrifice? This is key as salary sacrifice allows you to get National Insurance relief as well as tax relief as the payment is taken direct from gross salary. Once you have explored company options - and assuming there are none. The next stage would be some sort of personal pension (SIPP is an example that is widely used these days). A SIPP can be opened with many organisations banks and Investment platforms. As you are talking very short term in financial terms, I would suggest you want to hold this in a deposit type account and not invest it as the risks might be too high (usually looking at least 7 years invested). This is exactly what I am going to set up for my OH. She has six years until she will take her DB pension. We are going to set up a SIPP (probably tomorrow) and contribute into this for this financial year and 2020/21 and 2021/22. While I will make my final choice probably tomorrow, it is likely going to be done through the Halifax where they offer 0.75% interest on cash. Fees for under £50k are £22.50 / quarter. Holding cash in SIPPs is very poor for interest rates and you pay fees. BUT you add the 25% uplift in and it is fine for a couple of years. The plan is in financial year 2022/23 to take the 25% tax free plus £12500 tax free sum (assuming it doenst change). Then take the £12500 for the two tax years after that. She will need to pay tax on the rest. After that she will take her DB pension and be a tax payer again. And she will pay the £2880 into a pension form then on (as I will be doing from next year). As tax payers we will gain £180/year each from this for as long as it lasts. All the above is dependent on budgets and what they do with pensions. Not sure if this makes sense? Edited at 06:33 PM. |
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