Live webchat with Prudential's Vince Smith-Hughes, Monday 26 November, 2pm

flopsybunny

I see you've mentioned drawdown as an alternative to annuities. Could you possibly explain whether drawdown is available to everyone and what the implications are of taking your pension in this way?

Drawdown involves taking an income from your fund rather than having it guaranteed from an insurance company in the traditional way as with an annuity. This gives you more flexibility over income as you can also alter the amount you take (typically within limits), but there is also a risk as if your fund value drops, your income could fall in the future. Whether it is suitable or not, very much depends on your individual circumstances and attitude to risk. Whether you have any other sources of income will also be important in determining if it is suitable.

We'll post up some useful websites for you to have a look at, at the end of this webchat, which will give you further information on drawdown.

mincepie

I had a hopeless Equitable life pension - having opted out of SERPS - whatever that meant! (still don't know) . I was out of the workplace having children and then have come back part-time and am almost 50 with no current pension. What can I / should I do. Every time I think about it I panic, but then do nothing. My dh has a pension but he keeps saying it's going to be worth nothing because of current economic climate. Would I be better buying a small flat to rent out (i think I could manage a deposit and small mortgage) and then perhaps sell that when I want to retire (or move into it and sell our house when we retire?)

First of all, we've just released some information on our own website on couples planning for retirement, so visit www.pru.co.uk/guides_tools/couplesretirement/.

A few things to think about:

1 - Check your state pension entitlement and also if it is worth paying voluntary national insurance contributions. Have a look at the Pensions Advisory website for this one - www.pensionsadvisoryservice.org.uk. This can be complicated, but you can even speak to them in person if needed. Their telephone number is 0845 601 2923.

2 - Make sure you know what benefit your husband's pension gives you, if he were to die first. This depends on what type of scheme this is.

3 - Property as an investment has worked out well for many people, but it is also important to think about diversification. You mention you have a house already, so if you buy a flat you are very exposed to the residential property market.

4 - Check what the value is of your equitable life pension and if this needs any changes, for example where is this invested and whether this is still appropriate to you.

5 - It is also worth considering paying contributions to a pension plan, as this will give you tax relief on your contributions and a tax-free (25%) lump sum when you draw the benefits. Also consider ISAs, as though no tax relief is available, benefits are available tax-free when you draw them.

Have a read of the Money Advice Service website (www.moneyadviceservice.org.uk) and speak to an adviser if necessary.

Gally

Vince: what is your opinion of Discounted Gift Plans for IHT purposes? My IFA is recommending it, but it all seems a bit drastic. I am recently widowed and I know my late husband was a bit iffy about it, although the money man tells me that he was coming round to the idea . My 'Trustees' think it's a great idea - but they would wouldn't they! Your comments would be appreciated.

These can work out very well for some people, though it's difficult to say anything further as we don't know your individual circumstances. You should raise your concerns with the adviser who I'm sure will be happy to explain in further detail.

DavidH22

I have a company pension scheme but the industry of the company - newspapers - is in steady decline. If the company goes bust do I and my pension have any protection or do I then have to rely on State benefits?

If your pension is a final salary scheme, then there is a level of protection via the Pension Protection Fund (www.pensionprotectionfund.org.uk). Other types of schemes are protected via trust anyway, and your employer should be able to give you details of this protection. The assets of the pension scheme should be held separately from the employer.

crostini

Me again! If I decide my adviser isn't doing anything for the trail commission, can I just stop paying it? What about a rebate for the years I've already paid?!

Normally you can turn off trail commission but it depends on the contract with the individual provider. Sounds like you need to speak to your adviser!

There were numerous questions around pensions and property, and this is a question which is typically asked. The one overriding factor people should consider, is are they happy to just rely on this as a method of saving for retirement. People should also remember they may typically often own their house and if they start additionally investing in buy-to-let property they can be very exposed to just this one type of investment.

Pensions have a very wide investment choice, and whilst it doesn't include residential property, you can invest in commercial property funds if you desire. There are also many other types of investment available that can be held within a pension.

Pensions give you tax relief at your highest marginal rate and also a tax-free lump sum at retirement. Importantly before a pension is drawn, the fund value is usually available as a lump sum to your chosen dependent. There are also different ways of drawing a pension now, such as not only conventional annuities, but also investment-linked annuities and income drawdown.

Several people were questioning what they should do with existing pension funds and whether they should all be merged into one. There is no easy answer to this, but think carefully before transferring existing plans as these may have valuable benefits, for example, some existing plans will have guaranteed annuity rates which will be higher than available in the open market when you come to draw your pension.

The only real way of making sure all these factors are considered is by seeking professional advice specific to your circumstances and your existing arrangements.

We've mentioned a number of websites to look at which can help you make decisions, here's a run-down of them:

www.pensionsadvisoryservice.org.uk
www.ageuk.org.uk
www.pru.co.uk
www.moneyadviceservice.org.uk
www.unbiased.co.uk

If you have lost any previous pension pots, go to www.gov.uk/find-lost-pension or speak to the Pensions Advisory Service who'll be happy to help.

It's been a pleasure to chat to you this afternoon and there has been some really good thought-provoking questions. Hopefully you found some of the responses of use!