Retirement Q&A with Roger Marsden

I'd be very interested in understanding the options for generating an income in retirement, in case I've missed something when making my plans (main one being "learning to live on less").

My daughter is in her twenties with a husband and child, both are working. They can't afford to save for a pension at the moment, and probably not for the foreseeable future. When is the latest they can start? Are there other options? My daughter said she would rather buy another house and live off the earnings from that, but I think it's a bit risky.

joke

It is never to late to start a pension.
The longer you leave it the less you will get.
With regard to buying a house and living off the earnings that does involve risk.
A house could have a good rental market now but who knows how good it will be in say 40 years time?.

Frank

I have various small pensions is it financially viability to combine them for a larger pension?

Prince

You need to look at the various pension scheme rules etc and get transfer values and then see if the scheme you want to transfer them in to will accept them and if it will you want to know the benefits you will get.
I have a friend who had 4 different pensions and he could not transfer them to his final employers scheme where he worked for 18 years.
He now receives money in to his bank account on 5 different days of the month as he now gets his state pension.
That said another person I know worked for a council for the first 5 years of his working life and claimed his pension 36 years later.
Even though he had evidence of the pension and he put in the claim about 6 months before it was payable it was paid about 18 months later because the council could not find his records.
He got all of the arrears but that would have not been much good if he had passed away during that time.

Frank

Frank

Frank we were asked to put questions to the guest, Roger Marsden. I don't think you need to give your opinions in this instance, valuable though they might be on ordinary threads.
I look forward to reading the Q&A.

My employer doesn't offer a pension and I haven't taken one out with a bank/any other company. Should I start as soon or just wait until they do start offering a pension scheme? (I assume they will in the next year or so with the laws changing)

I lost my job in December and the chance of getting another is pretty small, so I'm looking at the transition from unemployed to retired. I have been talking to a pension adviser and she is recommending consolidating my various funds into a drawdown pension. She also recommends taking the maximum tax free cash sum, but says that could be done in stages. If I take more than a very small sum I would lose the state benefits so that isn't necessarily a good idea.

I have additional complications like being part way through a divorce that is likely to reduce my pension by an as yet unknown amount.

Any comments on these factors?

Assuming monthly company & state pension will (just about) cover normal life, (until the gas bills go up by 50%) what method would you use to budget your savings for
a) cars /boilers/roof repairs/ hip operations/ personal care and all the boring stuff

and what proportion for
b) bucket list/ big trips/ enjoyables?

I have a state and work pension which combined are adequate for my needs provided that I am careful but I also have money which I can only use to buy an annuity. These rates are so low at present I am unsure what to do. I believe that if the amount is under £15,000 one can take it as a lump sum but mine is more than that.

I feel that I have to do something soon as I retired 10 years ago and time is marching on.

Hello Roger. My son will be a teacher in September - do you think he should pay into a pension with his employer, or seek to get one from another provider?

Oh I've been thinking about the future recently. Roger, what's the best way to manage finances so you have enough to pay into a pension? At the moment, I'm unable to afford it after childcare costs, train fare, food, petrol, mortgage, bills blah blah. How much do people usually put in a month for a pension?

I should have taken some financial advice years ago. It's a bit late for me now but may help someone else to make decisions. I took early retirement with a monthly pension and a lump sum of £16000. I expected to get my state pension at 60 and to live off some of the lump sum until then. Unfortunately I fall into the bracket of women whose state pension date is gradually slipping further away from us. I have now used up almost all of the lump sum. In retrospect should I have invested the £16000 in an annuity? If I had what sort of monthly amount would I have received? More importantly, had I died in that period the £16000, albeit reducing monthly would have been in my account to be inherited by my children but if it had been invested in an annuity what, if anything would they have received?

I am eligible for a small statutory pension only (about 45 odd a week) because I contributed for less than 10 years. Shall I take the lump sum when I retire early next year?

What's the change of interest rates on saving going up in the future.

When we retired we had our occupational pension and I had the state pension hubby was below 65 then so topped this up with interest on savings.

At that time we were getting 6.98% which was good we are down now to 3% on some accounts if we are lucky.

We manage well as a couple but if we were on our own it would be very different.

I am in my mid-50s and have recently come into an inheritance of £50,000. I don't have much of a pension but I do have a house worth quite a bit, though i am still paying off the mortgage. What would you do with this money?

I could afford to put away approximately £500 each month at present - how would you advise me to save this? I have a (small) personal pension, into which I am currently paying £100 a month and a few (disrupted) workplace pensions - I have always worked but mostly freelance. I am not at all confident about my ability to live on any pension I would currently get when I retire.

Thanks

I am self-employed and have no intention of retiring until I am about 75 - later if possible. Does this affect how I need to think about pensions?

How are you supposed to go about choosing a pension fund? I'm not sure I know the difference between gilts and bonds, or between high-yield bonds and global bonds - at least, I can sort-of work out what they are, but I don't know what the implications would be for me.

I expect you will say get a financial adviser but how do I choose one of those? They presumably have prejudices too, and they are on incentive deals for signing people up. There has been so much bad publicity about mis- selling that I don't trust anyone to explain it to me. But I don't trust myself to understand it either.

My husband has a stakeholder pension but neither of us is entirely clear how this differs from a personal pension. Could you please clarify?

What is the point of saving for a pension at the moment when the value of annuities has gone down by 25% in the last five years? This actually looks like dis-saving to me.

If you live in the South East, aren't you better off investing in property, which there is a shortage of and which keeps on rising in price?

I have a Teachers' Pension and now claim my state pension. I also had AVCs to make up for the time I was not in paid employment but working as a mother at home. I simply invested the AVCs with Prudential with whom I had the AVCs . Was this as good a choice as any? Can I change now if there is a better deal out there?
I also have a small redundancy payment that I simply put in the highest interest account I could find at the time. Should I use this money to a) pay off the last £1000 on a credit card and the rest on a new car rather than taking out a new credit agreement to buy a car?? Which will cost me less??

My daughter, now 38, works part time in a shop and most of her earnings at present go to child care. Hopefully this will improve when her daughter starts school in a years time. If she is then able to save should she invest in a pension or put the money into ISAs? (She saved into a cash ISA pre-baby - but this money has now been used in living expenses)

My pension, indexed linked, after £40 a month being put into it for 10 years has produced an income of £540 per annum - not a lot. What amount would she would need to put into a pension pot in order produce the equivilant at retirement of around £50 per week? Is it worth while her even attempting to save towards a pension - I have read that over £300,000 would be needed to produce a noticeable amount - but this was hopefully scaremongering.