Quote:
Originally Posted by myfirstrover
Got some detailed figures so it's up to me to work out the best options , sadly i won't get the £11.5k tax mark (not far off though )
|
Jon - is your scheme a defined benefit scheme or a defined contribution scheme?
If it is defined benefit (or Final Salary scheme) your pension will usually have distinct guaranteed benefits - as long as the scheme is reasonably well funded that is!
However, the spouses pension on the death of the original member can be quite poor compared to the full transfer of fund available within a money purchase Drawdown arrangement for example.
If it is a defined contribution scheme (money purchase scheme) then whilst the guaranteed retirement benefits are not there, recent relaxation of pension rules means that there are significant tho very different benefits now available via these schemes.
For example compulsory annuitisation at age 75 no longer applies plus the whopping 55% recovery tax that used to apply to any fund still in the pot on death of the surviving spouse has been scrapped.
Even better, this fund can be passed to your children tax free if you and your spouse die before age 75 - and it still passes to your children when you die after age 75 but the fund is taxed at the rate of the person receiving it.
All these rule changes are significant and not always appreciated by those, like yourself, who have to make a decision. So get ting advice is crucial
Remember - whatever decision you make is irreversible. Some options like Drawdown and Phased Retirement (also known as Staggered Vesting) allow you to take an "income" for many years and even until death - so these are increasingly popular - so I would suggest you see a pension specialist who is authorised by the FCA to give advice in this complex area.