Pensions

Some interesting stuff, although I would question thomas oliver 2 costs for care homes. My late father who died almost a year ago was paying £900 a week, for perfectly satisfactory but not outstanding care. Thankfully he didn't have to avail himself of it for too long. Thomas does make the very valid point that should you have need of care and have any significant savings they disappear rapidly, and my question to my accountants as to what I should do with my fathers bequest was, spend it otherwise you'll give it away to the government, directly or otherwise.

The state pension is also under some scrutiny by me. I received a letter from the DWP last week inviting me to claim my state pension, I was 65 at the beginning of January and I am informed I can claim state pension from May this year, thus far so good and in checking my NI contributions I find I have 47 fully paid up contributing years so you would imagine that apart from a small period of contracted out SERPS, I would get most of the £165 a week. Apparently not, prior to 2010 you needed 44 years NI contributions, after then the contributing years were reduced to 30, so I was still ahead, however in 2016 the period was increased to 35, and since at that time nobody by decree had more than 30, I find at 65 with 47 years of contributions I am only entitled to 33/35ths of the state pension, less my contracted out SERPS. On this basis it is going to be 2021 before anyone will have enough NI contributions for a full state pension by which time retirement age will be what, 67? Am I alone in thinking that the contract between myself and the government established in 1972, of which I have fulfilled my side, has just been thrown away for political expediency.

Right that's purged the spleen, I feel better now, if no less disgruntled.

Mr Angry of Glasgow

Edited By Martin Shaw 1 on 21/02/2019 21:36:15

I can confirm that care homes are charging £900 + a WEEK, about fifty grand a year, mother in law is paying this for a room about the size of a prison cell in a care home in Salisbury.

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+1 on this suggestion. Make sure your financial advisor works for a fee paid by YOU so he is not trying to sell you financial products that HE makes a commission on. And ask him straight up front if he receives any kind of commission or other payment from financial firms or anyone other than yourself. If he does receive such commissions or payments, go elsewhere.

Also there are plenty of good books at the local book shop on retirement planning etc. Well worth making yourself "financially literate" at this stage in life as one mis-step can cost you many thousands of pounds in the long run. But there are also many dodges and workarounds that can add thousands of pounds to your retirement income.

One thing all those books tell you is to avoid word of mouth advice from well meaning but unqualified friends. That would include me! So go and book yourself an appointment with a fee-only financial adviser. Will be the best money you can spend right now. (I went through this experience myself in recent years.)

Edited By Hopper on 21/02/2019 23:25:27

For a bit of light relief,

On reaching 65, I found that my pension from the Lucas Pension Fund would be £8.10 P A gross!.

Aviva, who were then administering the fund, offered to pay a lump sum of £56, instead.

This was too little, to my mind, (Hoping to live more than seven years ) so opted for the pension, rather than the lump sum.

15 years on, it was probably the right decision!

With regard to Financial Advisers, a good one can save you money.

At one time, mine advised me to pull out of a bond which had been paying very good reversionary and annual bonuses. Two weeks later, to do that would have cost me £5K. His fees were money well spent.

Howard

Good points Martin,

I'm about 18 months younger than you and have to wait until I'm 66 before I can draw, mine, for my partner, like you born in '54 (?) , she has to wait an additional 5 years and 7 months.

Regards

We have all been shafted by the people in Westminster who I believe after 1 term in office get a pension for life?

Tony

Tony Not only that but we are paying for it

Roy

In the 90's I worked for a firm who were offering a 'Stake Holder' pension plan which I signed up to. This pension company now sends me annul statement that reads like a comedy sketch script. Fees now swallow about 13% per year and in 10 years time, when I'm 65 I will owe the about £200 a year to administer my non existent pot in theory. And, apparently, as a mark of good will they are prepared to wave this fee. You can't say fairer than that can you?

Like a lot of people my best old age plan is keep on going 'til you drop down dead in harness between the shafts.

Guy

Hi, I was in a final salary scheme with the company that I worked for, for most of my working life. When I left that company, I had a choice of taking the pension then, but with penalties or leaving it until my normal retirement. I spoke to my uncle who was a bank manager, about my options, but he could not give me any direct financial advice, but he did advise me to look at things like the solvency of the company and if they were likely to survive past my retirement date and a few other factors I can't recall now. At the end of the conversation, he said, " just remember that even the experts don't always get things right".

When I invested my redundancy money from my former employer with my bank, I had financial advice from them for a small fee, I also asked the adviser about my pension scheme, but was told that the bank would not give advice on a scheme they had no involvement in, but he did say, off the record, what he personally would do if he was in that position. I did leave it until my normal retirement date, but then had a few choices, firstly I could take a pension with a tax free lump sum, secondly, I could take a smaller pension and a much larger tax free lump sum up to the legal amount allowable. The other options were not a consideration in my mind, so were dismissed. I calculated the difference between the two above options and determined that I had to live at least until I was eighty five before starting to loose out by taking the larger tax free lump sum and smaller pension. To me the choice was a no brainer. I will add that the pension scheme that I am in is administrated by a trust fund and it is indexed linked and will have to be paid for the rest of my life, whatever happens to the company.

When the company first set up this scheme, many of the workers took some various independent financial advice of this scheme over a private scheme and all of them were advised to stick with the company scheme as it could not be matched by any private scheme for the same cost and it also carried a payment to the spose of any employee of the company upon their death while working for them plus a widows pension in any event. It really was a good scheme, but alas, a short while before I left the company, the final salary scheme was not available to new employees but would carry on for those who were still in it and that remains so even now.

Regards Nick.

I am 80 in October and this morning i got my annual state pension increase letter, I am informed that I will get an extra 25p a week when I reach 80. If I save it for a year I might be able to buy a bottle of second rate champagne to celebrate!