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Come and talk to me about your pension

(31 Posts)
Paintyourbox Tue 20-Nov-12 15:37:38

I don't have a pension yet (I'm 26) and the scheme my company have isn't that great (they don't make any contributions) and it is not based on my final salary.

With that in mind I am going to try and "do it myself" so I'd like to ask you about your pension plan.

How much do you save per month? How does it all work? I sometimes think just stashing cash in ISAs or a buy-to-let property may be the way forward but not very sure!

Notmadeofrib Wed 05-Dec-12 13:29:56

Well offsetting IS something that can happen, but it may not be quite as straightforward as "you have the pension, I'll have the house".

I really think you need advice as I can make some suggestions, but I'm not a practising divorce lawyer so really that means I'm guessing.

Have you tried talking to your ex about what you would like?

LostandLonley Wed 05-Dec-12 15:55:56

His "intention" was to sit down and discuss. The reality is all requests for mediation etc ignored, so I am trying to do a lot of the groundwork to save money. If I can calculate the pension , I will be in a better position to haggle, so to speak.

Notmadeofrib Wed 05-Dec-12 19:25:30

Well I would suggest that the valuation you have is good enough to haggle with. Unless there is another massive financial crash the value will vary but unlikely to be that much different (I'm talking over 10%). Unless he realises that his pension is an asset 'with handcuffs', I'd go pound for pound offset as an opening offer, but don't be surprised if that is NOT the advice he receives.

He can take 25% as tax free cash, but then he will have choices as to how to take the pension itself: annuity, drawdown being the main options. That tax free cash is obviously an asset that is £/£ something you can measure.

An annuity is a commitment for an insurance company to pay an income for life. No longer is this allowed to be gender specific (crazy but there we go). You can buy a guarantee 5 or 10 years or 'risk' the lot. You can get estimates about the income he could generate from his pension pot off the internet.

His fund is large enough to stay invested in the stock market however and not take an annuity. He could do so and take an income from the fund (certain rules as to how this is calculated), but the ability to strip it of it's assets is not an option (unless you have £20,000 of secured income).

Don't forget that he will have earned SERPS, graduated state pension & S2P during his working life and you are also entitled to some of this (this can easily double a state pension if he's not been contracted out) I would suggest a BR19 (estimate of state pension entitlement) is also a good idea here. This is a valuable asset.


LostandLonley Fri 07-Dec-12 09:45:31

Thank you Notmade , very helpful , have contacted an IFA for set fee consultation. Looks like he has contracted out from the paperwork I found, also found among the paperwork Gov Gateway State Pension Forecast user I.D. dated spring of 2011. So would appear he had being doing HIS sums before he left! Hmmph!

Notmadeofrib Fri 07-Dec-12 10:23:09

well he may have only been contracted out for a period of his working life (it hasn't always been possible and now it's stopped), so ensure the state second pension is included.

Good luck!

Gladyss Sat 08-Dec-12 00:08:51

Having paid pension most of my working life 32 years I find that putting money for someone elses control is somewhat of a gamble. Lots of things can happen during your working life but when you put your money into a scheme the benefit is you have your employers contributions. But the returns and conditions are limited. I had 6 months training as financial consultant and the only people who appeared to have life under control were those who invested in property-paying their mortgage off early or those who have bought property for buy to let. That way the asset value remains, Of course the government may bring in a property tax which may undermine the benefit of this. I think the benefit of the old final salary schemes are largely a thing of the past,unless you are working for a government dept of course, and the money purchase schemes are very much changeable and very few will give you a guaranteed income, But you are wise to consider saving for the long term

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