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Author Topic: Pension question.  (Read 2763 times)

solarish

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Pension question.
« on: 05-08-17, 07:41AM »
Hi,  I am 70 years old still working for Tesco. If I take total value as cash from Tesco defined closed pension can I still continue to pay into The new LG pension.  I have worked out if I take cash cash I would only break even at 90 years old and I have other pensions so not a problem.

Mozzer

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Re: Pension question.
« Reply #1 on: 05-08-17, 09:27PM »
Ring the pension line so you know for sure,but I'm sure you can

lucgeo

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Re: Pension question.
« Reply #2 on: 05-08-17, 09:32PM »
Dear god!! Take the money and run, my friend!! Do you want to end up the only self funding nursing home resident??  :-X
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Mozzer

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Re: Pension question.
« Reply #3 on: 06-08-17, 06:43AM »
I did take a private pension from doing it when I was a 20 I ended up paying 40% on a part of it,25% of it is tax free when you're over 55,

stockrotateman

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Re: Pension question.
« Reply #4 on: 06-08-17, 10:33AM »
You cannot take the old pension as a cash lump sum, only 25 per cent tax free the rest as a monthly payments which you will be taxed on. Ring or email them ask for a statement on your options on taking your pension now. The new pension has nothing to do with the old one, that's run by L&G the old one is still run by the trustees, just make sure you tell them you are going to carry on working.

cosmosmallpiece

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Re: Pension question.
« Reply #5 on: 06-08-17, 11:50AM »
Stockrotateman why can you not take a lump sum from your old pension ? Do you know thanks

AlexM

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Re: Pension question.
« Reply #6 on: 06-08-17, 01:20PM »
The old pension is a defined benefit scheme - there is no total "lump sum", other than perhaps the 25% tax free cash that may be able to taken (& a reduced monthly payment for life thereafter). The closure booklet says: 'at retirement, you may choose to give up some of your pension in exchange for a lump sum, within the restrictions in the Scheme rules'.

In a DB scheme there isn't really a "pot" of money, more an accrual of monthly pension payments once you retire & possibly some additional benefits such as a widow's pension on your death.

If you wanted to just withdraw all the pension, then you would probably have to ask for a CETV (which you can do on the old pensions website), but if the transfer value is above £30k then you'll have to pay for a regulated IFA authorised in pension transfers to do this. This will cost several thousand £'s and if they consider you will be worse off they may not authorise it.

Think carefully about transferring the DB pension to a DC scheme. The DB pension is a generous one (hence why they closed it!) & it would take a lot of money to "buy" equivalent benefits on the open market if you wanted an annuity (monthly payments for life, increasing with inflation every year & a spouses pension after your death). The cash equivalent transfer value they give you might not be enough to achieve a like for like pension in retirement.
It's really something that you'd be best speaking to an IFA about or PensionWise, who give free consultations, but not actual advice.

If your DB pension does not promise to pay a lot in retirement, & you have other sources of income then transferring & cashing it in may be suitable. But if it's due to pay a few thousand £'s a year, you may have to jump through the hoops to get it. Pensions are heavily regulated...

blutopia

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Re: Pension question.
« Reply #7 on: 06-08-17, 01:43PM »
stockrotateman and AlexM are entirely right in what they say except that the lump sum available from the old DB scheme may not be exactly 25 per cent because, as AlexM says, there isn't really a 'pot' of money with a DB scheme.  As stockrotateman advises, Tesco's pension department can provide a quote of the two main options: a monthly pension or a lump sum + a reduced monthly pension.  As AlexM says, the third option to transfer the entire fund to another scheme does require 'permission' from an Independent Financial Adviser if the value is over £30k - very costly up front and very unlikely to be approved.

stockrotateman

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Re: Pension question.
« Reply #8 on: 06-08-17, 02:12PM »
It's 25 per cent  :thumbup:

blutopia

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Re: Pension question.
« Reply #9 on: 06-08-17, 02:24PM »
The quote I received wasn't 25 per cent.

stockrotateman

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Re: Pension question.
« Reply #10 on: 06-08-17, 02:26PM »
I would question that then every pension I have received has been 25 per cent.

lucgeo

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Re: Pension question.
« Reply #11 on: 06-08-17, 02:40PM »
I beg to differ. Being over 55 I applied for my booklet with regard taking my pension out. One of the options was to take a ful cashl lump sum, the first 25% tax free the remaining being taxed.

I will get a tax rebate at the end of the financial year, as I am under the £11.500 annual income threshold. As it was under 30k I did not need to seek financial advice.

It was right for me, the monthly forcast pension payments were meagre, and I also have the 7.5% voluntary pension with Tesco matching it.
« Last Edit: 06-08-17, 02:43PM by lucgeo »
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blutopia

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Re: Pension question.
« Reply #12 on: 06-08-17, 02:42PM »
It's the reason why I investigated transferring the pension to another scheme where I would be able to get 25 per cent and found out the complications of over £30k.

AlexM

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Re: Pension question.
« Reply #13 on: 06-08-17, 08:35PM »
www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/06/what-is-commutation

This is a good read, if you can get your head around the pension jargon. If not, then skip to the bit titled Full Commutation & it'll explain how & why Tesco (&HMRC) may allow you to take it all out as a cash lump sum.

Welshie

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Re: Pension question.
« Reply #14 on: 01-08-19, 10:17PM »
Does anyone know how I increase my pension  contributions  ?

NightAndDay

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Re: Pension question.
« Reply #15 on: 01-08-19, 10:22PM »
The ourtesco website links you to the pension website where you can adjust your contributions.

Welshie

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Re: Pension question.
« Reply #16 on: 01-08-19, 10:39PM »
Great thanks