WHD
Striker
But you can take 25% in one go, and then the rest each year until its gone. For example, say you have £40k you could take a £10k lump sum, then take out the rest each year until it's gone, instead of £2k a year for the rest of your life.
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Retirement
- Thread starter Shieldsman
- Start date
Matt Hopkins
Winger
Why does she think that?
I'm not sure, which is why i need to go and speak to a financial advisor!
Wild Card
Striker
I financial advisor may be better placed to answer but would be curious to see her logic.
I'm not saying it is wrong, when I left EY around 8 years ago, they had their own Standard Life investment plan for pension. My pot has decreased massively since then through a combination of 'management fees' and poor investments.
OldNewtown
Winger
I'm normally a little wary of having potentially substantial sums invested in one company, ask the employees of Northern Rock for example.
I prefer to spread risk.
Then again if only I'd invested in Microsoft back in...
I prefer to spread risk.
Then again if only I'd invested in Microsoft back in...
Darlo1973
Striker
I'd be careful with the language.
Usually a "share option" is the company giving you a share in the company so that if they are acquired then you will get a share of that purchase as a co-owner. This is common in start-ups as offering shares in a company which currently isn't worth much doesn't cost them much. It's less common in bigger companies. There aren't any downsides to accepting share options as you can't lose money on them.
This is usually totally separate to a pension scheme not as an alternate to one.
Typically your contribution and the employer matching payments will go into a fund which is invested across the market. Putting your pension into a single company shares is A Bad Idea.
Even if you only plan on being there a few years, take every penny of pension money they offer you. It's free money and amazing how much it adds up.
Slim999
Striker
You dont stipulate your salary so let's assume you earn around average of £35k per annum.
You put 5% away and your employer matches that - so 10% of £35k per year..
...= £3.5k per year
So over 5 years you'll accumulate around £20k. This will grow ( hopefully) a few % per year if it's a fund that wisely invested .
So perhaps in 10 years ( if you retire then), it may be worth £25 - £30 k
The question then is how much will the shares be worth - and what is the prospect for the company in terms of growth .
Hooky
Midfield
Is this a Share Option or a Share Save? A share option is usually shares given to you as part of your package which you can sell at a later date, Share Save is where the company give you the right to buy shares at a reduced set price, you buy monthly at the reduced set price for a set period when you are then free to sell them at hopefully a higher price and if not the company give you the money you invested back plus a small amount of interest.
If you are a basic rate tax payer then for every £100 you put in to your pension, you will end up with £225 in your pot (£250 if your employer matches the tax relief as well).
Obviously, the devil is in the detail, but in my view, the price of the shares would have to be at a significant discount to the market price for it to be worth it. I appreciate you are confident that the company's future looks bright because of its sector and outlook. But if those facts are publicly known then they will already be factored into the market price of the shares to some extent.
No warranties. DYOR etc.
D
Deleted member 49400
Guest
We'll have enough to buy a Villa in Andelucia (Around 129k) and get both our pensions from the UK and Spain which will be more than enough to live on hopefully. With extended trips to the UK in August when the heat is unbearable.
Sing in the Roker
Midfield
Can anybody advise on this.
Q, My employer has said you don’t pay any pension on the first £520 earned.
I understand that a company has to enrol you in a pension if you earn more than this.
Q, My employer has said you don’t pay any pension on the first £520 earned.
I understand that a company has to enrol you in a pension if you earn more than this.
42
Striker
They don't legally have to pay on that bit. Think owa lass is in similar situation where they're paying bare minimum (or it was originally, but think its a bit better now as company has changed hands)
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Sing in the Roker
Midfield
WHD
Striker
So back in 2018 I got a transfer value for my final salary pension and it was £152k. I went to a financial adviser with the intention of getting him to sign the forms to transfer it, but he talked me out of it, saying I was too young, the risk was on the company and there could be a market crash etc.
I've just got an updated transfer value and now it's only £102k, so it looks like I received duff advice. I't would have grown around £50k if I'd put it in my other pension, not lost £50k, so the financial adviser has cost me about £100k
I've just got an updated transfer value and now it's only £102k, so it looks like I received duff advice. I't would have grown around £50k if I'd put it in my other pension, not lost £50k, so the financial adviser has cost me about £100k
42
Striker
So back in 2018 I got a transfer value for my final salary pension and it was £152k. I went to a financial adviser with the intention of getting him to sign the forms to transfer it, but he talked me out of it, saying I was too young, the risk was on the company and there could be a market crash etc.
I've just got an updated transfer value and now it's only £102k, so it looks like I received duff advice. I't would have grown around £50k if I'd put it in my other pension, not lost £50k, so the financial adviser has cost me about £100k
You didn't really get duff advice.
You haven't lost anything in the final salary pension as its final salary & exactly what it was before.
The transfer value was previously higher because gilt rates were lower. Yes you could've got lucky in transfering at the correct time, put it all into equities then won on the back of the post covid asset price boom. But all of that was completely unforseen & can't blame the advice on the back of the benefit of hindsight. Had you transferred it, then put it into a fund with high bonds, the pot value would've tanked anyway & would've complained about duff advice.
WHD
Striker
I went to the financial advisor fully intending to transfer my pension into my other pot. That pot has grown over that time, not lost a third.
If the financial advisor had done what I wanted and not talked me out of it, I'd have about £100k extra in my pot.
That seems like duff advice to me. What's the point of a financial advisor if not to mitigate for unseen circumstances?
42
Striker
You're blaming him for not seeing a once in a 100 year event global pandemic? Really? What's happened over the last few years is not the normal. Even the boards interest rate expert said he'd eat his hat if rates went above 1%
As far as final salary pension go, then general advice is to keep them
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Vauxie
Striker
Sorted!
Brother Lee
Full Back
A financial adviser is there to give you advice that best meets your needs. Not take instructions as that is what is known as 'execution only' where no advice is given. You can't transfer a final salary pension without advice from a qualified transfer specialist financial adviser.
You've simply quoted what the cash equivalent transfer value was eg £150k. You've assumed if it had gone in a particular fund it would have increased 25%. What if as @42 has said, you'd put it in a fund high in bonds and your £150k was now worth £100k? Would that be 'duff advice'? Hind sight is great.
You haven't mentioned what the final salary pension was per annum at your intended retirement age? I've no doubt that will be a lot higher now with the guaranteed inflationary increases that have happened since the time of advice.
How much did you pay for the advice? Was it documented? Was there a full advice process followed?
