Type of pension...

My younger daughter (an underwriter with a big insurance company) suggested that she might be able to get me a good annuity rate for my pension. However, I have an index linked final salary pension so I'm not sure if this is transferrable - or if I could get a better deal.

Both Dianne and I have another final salary pension to come in. Does anyone know if these are transferrable? Are final salary schemes treated the same way as any other pension?

Re: Type of pension...

I have heard some bad things about some annuities over the years and people losing lots of money because of the set up/admin charges.

I would think an index linked final salary pension is as good as it gets and I would not think commuting it but I am no expert on pensions.

See here..
http://www.which.co.uk/money/retirem...ng-an-annuity/

Re: Type of pension...

George matey, leave well alone!!! - your final salary pensions are safe where they are. Annuities are invested in the stock exchange (among other things) and as we both know the Stock exchange indexes are capable of moving down as well as up and if that happens, a chunk of your annity will be lost with it.

Re: Type of pension...

I think you're right. I had a quick look at what some of the pension providers were offering and none of them came close to what I'm getting at present. Perhaps in better times they might offer better pensions, but not at present.

As far as I can see, you need a hell of a large pension pot to get anything decent.

Re: Type of pension...

Yesterdays budget has had massive ramifications and means from 2015, you can now take the whole cash pot without needing an anuity.
First 25% taken tax-free, and the remainder taken at 20% tax rate if withdrawn correctly

Re: Type of pension...

I am far from qualified to comment on this topic, but if I have understood this change to pension pots, George is planning to allow easy access to pension pots, thus releasing billions of pounds into the economy.

Some people will remain prudent, but others will not be able to resist the urge to be profligate. Rather like the council house tenants who, given the right to buy at ludicrously low prices, bided their time and and then
selling asap at a great profit, soon spent.


Hey ho, what do I know?

Re: Type of pension...

Quite right but the relevant phrase in it all was their money, so their money IMO people should be allowed to do whatever they want with it.

Many people don't even get to retirement so saving for it is wasted, many have a few good years when they could use the money to enjoy life but end up having to fund care later.

Re: Type of pension...

I don't have anything now except my State Pension to look forward to in 2016 as I've already been forced to draw-down my two small pensions because I feared for the annuity rate declining back in 2010.

I was out of work and it was getting desperate at the time and I'm also in receipt of a Final Salary Pension so, with my part-time working wages, we live reasonably well but it is a fine line we have to take on all of our expenses.

I took time and did my homework before I made the decision and that luckily coincided with an upward blip in annuity rates - so I went for it.

It didn't cost me anything as the people I used were paid by the pension providers and nothing was reduced in any way as a form of payment to them - got all the paperwork from the two companies to prove that before I even went ahead.

Had things been different I'd still have two small pensions and the Final Salary one but losing three good jobs to redundancy in ten years b******d that all up for me! stevmk2

Re: Type of pension...

I'm rather confused by all this but I understand that this new scheme does not apply to people already receiving annuities or those with final salary pensions - so that lets me and the wife out.

Re: Type of pension...

On the other hand someone in good health could look forward to 25 years of retirement. The problem is that a pension that looks good today is probably going to suffer 25 x 5% inflation compound and will have a buying value of less than 1/3rd of todays value by year 25 > Something you need a very good financial advisor to navigate around.