Pension Discussion

Personal Pensions

At 50+ we should be thinking about our pensions, being clear on how much we will have to enable us to plan for our future. Ive recently had a meeting with Pension Wise to find out more about my options. I hadn’t realised I had 6 choices:
1: Leave my pot untouched
2: Buy an annuity

3: Take (up to) 25% tax free and get the rest as regular taxable income. This is often referred to as flexi-access drawdown
4: Take cash in chunks as and when I need it, 25% each time is tax free
5: Take all the money but only 25% is tax free
6: Mix and match
Its worth booking an appointment, and its free. It was helpful to learn about different options and to get the follow up material which includes a list of questions to ask your provider. Ill be on the phone to them soon.
Its also worth getting a sense of how you will manage in retirement using this tool from Avivia. You may have seen the ad where two younger people get transformed into someone over 60 and see how they life will be if they dont make changes – the gym, hairdresser, nice car and meals out or counting every penny.

State Pension

You may already have your state pension, and Im a little bit jealous if you got yours at 60, Ive got to wait till 66. I hadnt been aware of these changes and suddenly there will be an extra 6 years to wait. Ill be ok, Ill carry on working and saving, but for some it can have a negative impact. Not everyone can work at home.
Many years ago, I was a welfare officer working for Royal Mail, running pre-retirement seminars, and a good number of the postal workers had health problems, its a physical job, either carrying heavy bags, climbing in and out of vans, with lots of twisting. It would be hard for them to carry on working.

The Importance of a Review

I like the way that the government offers a pension review, and its free. But equally important is a life review. Thats why I write about wider issues than just careers.
John Cridland has published his final report on future rises in the state pension age. Some of his findings include:
[icon name=”caret-right” class=”” unprefixed_class=””] State pension should rise to 68 faster
[icon name=”caret-right” class=”” unprefixed_class=””]Triple lock should be abolished
[icon name=”caret-right” class=”” unprefixed_class=””]Universal state pension age
[icon name=”caret-right” class=”” unprefixed_class=””] Early access to pension credit
[icon name=”caret-right” class=”” unprefixed_class=””] Ten-year notice of any change
[icon name=”caret-right” class=”” unprefixed_class=””] A one-year increase in the state pension age in any ten-year period
[icon name=”caret-right” class=”” unprefixed_class=””] Carers
[icon name=”caret-right” class=”” unprefixed_class=””] Mid-life MOT
[icon name=”caret-right” class=”” unprefixed_class=””] Automatic enrolment
A great article that explains this can be found here. And press coverage includes this from The Express.

The mid-life MOT is interesting

Everyone aged 50 should be offered a career and pensions mid-life MoT in which they are encouraged to make plans for work, health and retirement.
Is this really going to happen? How will it be funded?
Are you going to wait to see what you get or arrange to talk with someone like me?
Universities offer free career coaching, but for many young people its not enough. They are expected to know what they want and have 30 minutes to discuss. Decisions have a long-term impact and paying for career advice is an investment, not a cost.
In the same way are you going to drift into later life/ retirement, and hope that it turns out ok, or be more proactive and make the right choices for you. Looking at things now, gives you longer to prepare.
No answers today, just seeking to raise awareness.

How about you? I’d love to hear your thoughts on this topic. Use the comment box below.


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