Retirement Expert

Here are a selection of the recent questions that have been submitted to the Retirement Expert which you may have seen in local publications.

Should you have a question for the Retirement Expert – simply email This email address is being protected from spambots. You need JavaScript enabled to view it. and Steve will respond to your query and you may be published in our next feature.

Here are a selection of the recent questions that have been submitted to the Retirement Expert which you may have seen in local publications.

Should you have a question for the Retirement Expert – simply email This email address is being protected from spambots. You need JavaScript enabled to view it. and Steve will respond to your query and you may be published in our next feature.

Lost pension – how do I find it ??

Q.I paid a pension into the company I worked with a small company back in the early 90’s. This company was taken over in the mid 90’s and then again. I left the company in the late 90’s having worked with them for 10/11 years. I don't have any idea what happened to my pension. How do I find out??

A. If you don’t have contact details or an address for the scheme provider or administrator (this should appear on any old paperwork that you may have received in the past about the scheme) then you could try the Pension Tracing Service.

This is a free service provided by The Pension Service and is usually very good – for full details of the service and how to access it please follow the link below.

http://www.direct.gov.uk/en/Pensionsandretirementplanning/Companyandpersonalpensions/DG_10027189

 

Level or increasing annuity??

Q. I am coming up to retirement and my pension provider has issued me with annuity quotes based on a level pension and a pension increasing at 3% - which option should I take??

A. In an ideal world the simple answer is that you should take the increasing annuity as it offers some protection against the effects of inflation – the level annuity may offer a lot more initially but it will gradually lose it’s purchasing power as inflation eats away at the value.

However in the real world many people will choose the level option as it offers a much higher income initially and they simply cannot afford to take the lower amount. The other consideration is that the annuity increasing at 3% each year will take approximately 12 years to catch up with the level annuity and a further six years or so before it pays out more in total.  

Small pension – what’s my best option?

Q. I have a very small pension plan with Scottish Widows valued around £12,000, as I am 65 this year I’d like to take the benefits but am unsure what is the best option given the small amount in my fund. I have no other pension arrangements apart from my State Pension.

A. If this is your only pension plan and you have never taken any benefits from any other plan or scheme in the past then, in addition to the usual option of using the fund to purchase an annuity, you do have the option to fully commute (surrender) the fund for a one-off cash payment – this is known as commutation on the grounds of triviality.

It is only available if you are over 60 and have a fund or funds with a value of less than £18,000 in total.

Normally a quarter of the fund can be paid out free of tax but the remaining 75% will be subject to Income Tax – however depending on your circumstances and other incomes you may be able to claim some or all of this tax back.  

 

 

 

Hide comment form Hide comment form
 
  • 1000 Characters left