Well thats it,I’ve had two weeks of retirement parties that have been unbelievable with the people who made the effort to come,and the mass of flowers and gifts…truely heart warming.
My dilema now is how to take my pension.
I am 44 and will get a pension that is enhanced as if I were taking it at 65. My husband who is 56 is in a situation where he may soon be forced to take early retirement as they are cutting staff where he works.
I know nothing about pensions but do know there is 18yrs left to pay on our mortgage.
The pension offers paying a considerably larger lump sum if you agree to a reduced monthly pension payment.
So the choice is larger lump sum and smaller monthly pay or lower lump sum and more each month.
How on earth do you decide what is going to be best long term?? Especially when hubby is on less income and I can guarantee we will need to make significant house alterations to accomodate my worsening mobility.
Hi, don’t really know without knowing your full financial situation. Do you think it would be a good idea to take a larger lump sum now and pay off your mortgage, again I don’t know how much you pay monthly for your mortgage. Interest rates are currently very low but won’t always be like this, impossible to predict where they are likely to go over the 18 years you still have left on your mortgage. In my opinion, it’s always a good idea to reduce debt wherever possible. Would taking the bigger lump sum allow you to fully pay of your mortgage? Then, of course, you would have a monthly saving by not paying your mortgage or by, at least, paying a smaller monthly amount to you mortgage. I wonder , is your mortgage, linked to an endowment or is it a repayment mortgage? I know about making home alterations, I am currently doing that myself, I guess you need to factor that in to what money you have, even if you don’t make the alterations straightaway. Also might be an idea to review your financial situation, are you on the best mortgage deal, also the best gas, electricity, phone packages. If you have savings are they in the best savings accounts. Are you claiming any benefits you might be entitled to. Cheryl:-)
Hi Pip, I took early retirement on ill health in 2000. I was 47 and hubby had just taken voluntary redundancy/early reitrement, a year earlier, as his firm was re-locating and looking to reduce staff. He was 50. His intentions were to find a part time job.Little did we know he would become my full time carer.not long afterr…
It is a bit different for you as your hubby is quite a way off state pension yet. But will he get works pension if he takes redundancy? Will he also get a lump sum?
Like you, we still have a mortgage to pay…another 8 years. Our income is now DLA, Incap, Carers Allowance and 2 works pensions. We have no savings, as all our cash went on mobility equipment and house alterations.
I am now 60 and will get my state pension in 2.5 yrs. Hubby is 64 and will get his state pension next year. But he will lose Carers Allowance, as you cant have both!
You need to look at what you can live on. with.any benefits, plus pensions.
As regards possible future house alterations to suit your condition, the more you have in the bank, the less help you`ll get for a DFG.
Sit down with pen and paper and see what the difference would be as whether you take a bigger lump sum + a smaller pension, or visa versa.
Yes pip quite agree; it’s a strange decision only you can make.
What they do is for every pound of pension you give them they will give you between 9 and 16 pounds. So if you live longer than 9-16 years you start losing money.
So if you are awarded say £10,000 PY pension you can commute a quarter £2,500 and they will give you between £22500 to 40,000. Obviously the amount of pension you can commute and the 9-16 differs; pension rules.
So the question is how lucky do you feel and at your age I would NOT commute 1P. Keep all pension so in 9-16 years you will keep a decent pension. Of course this depends on circumstances.
As far as alterations are concerned speak to your O/T about a grant.
As others have said, I don’t think it’s a decision anyone else can make for you. In effect, you’re gambling on how long you expect to live. Not a very nice thought, perhaps, but if you think it might not be very long, then obviously better to take the bigger lump sum now: bigger monthly payments are not any good to you when you’re dead (although if your pension also provides for your hubby if you were to go first, it might matter to him).
If, on the other hand, you are betting on making it to a ripe old age, bigger monthly payments would be better, because you’ll be collecting them for longer!
I take it from what you’ve said that your pension provider does already know you have MS, and that is why you qualify for an enhanced pension, as if you had worked 'til 65?
However, you might qualify for even more, if you shopped around, and bought your pension annuity from another company. A lot of people don’t realise you do NOT have to take your pension from the same scheme or company you’ve always paid into. If you want, you can transfer your pension pot to a competitor, who offers a better deal. The difference can be many hundreds or even thousands of pounds, so it’s definitely worth taking advice, and not staying where you are, just because it’s easy. A lot of pension providers rely on members not realising they could go elsewhere, or not making the effort, so don’t offer them very competitive rates.
:Pip, personally I would take a lump sum and smaller pension, even though youll need as much income as you can to survive, being in recession and government about to cut DLA numbers. However, long term youll need to get rid of your mortgage as there is nothing more important than the roof over your head. Not only that, the smaller amount you get to live on is taken into account for benefits now and in the future.
A mortgage is a noose, however once paid for is one less thing to worry about. Your husband and yourself can then budget on whats left.
Everyone is very insecure at the mo and government arent giving us any break with their cuts agenda. Think longer term, what would you like, security of a roof or security of a good income weekly? I know which Id pick.
The delay in answering is purely access to computer.
George yes my scheme is £12 for every £1 converted. I would get a considerable sum if I converted it all,and could pay off my 18 yr mortgage thats outstanding,which as you can imagine with that length of time to go is very large. I could also pay off 3 loans we have. BUT as you say I have no reason to believe I wont be around for a long time.
Cheryl we are on a very low mortgage rate luckily we swopped to tracker and the payments went down and down and have remained low ever since.I know that this wont last forever though.
After being a single parent for many years before hubby came along, my mind set is ensure you have enough to pay the bills and some in reserve for any unexpected bills so you have peace of mind that they could be paid aswell.
I am finding this a really hard decision to make. Hubby is all for converting the max amount as there is the lump sum aswell,I just dont know.I have little faith in financial advisors as to me they all seem to drive posh cars and have exotic holidays so they are really in it for themselves.
Tina thanks for the shopping around advise as I didn’t know you could do this…but I’m having enough trouble deciding on this one. To be fair I am in the local government superannuation and they have been more than generous by agreeing to tier one.
Poll my hubby seems to feel we need to enjoy the next 5 yrs with holidays and doing things we haven’t had chance to do,as he seems to of written me off to a nursing home after then…he saw too much of my mom. I think thats what is driving his higher lump sum mindset.But when its gone its gone and I wont be able to earn it back again.
Bren so go on what would you do?
Thank you again for you lovely people being around to throw ideas around the pot with…without the rows it causes at home because of my insistance that what MAY happen to me shouldn’t drive decisions
Probably not a viable suggestion but have you thought of taking the larger lump sum and paying off biggest part of your mortgage and investing the rest? Probably not a very good suggestion when we are talking benefits though but might help with a compromise on the home front.
I think I would spoil myself with a financial advisor for something as important as this…If nothing else, it might help with a more peaceful home environment lol!
I dont think because of hubbys income,and what I would get pension wise we would be eligible for any benefits anyway.
After my ATOS medical for ESA when they said I was totally fit for any work I have little faith in the system anyway.
If 3 independant occy health docs can class me as totally unable to gain meaningful employment again,at a huge cost pension wise at the same time ATOS say I should be on jobseekers allowance I cant see me turning to them again.
I tell you what. I’m the first person to answer decision making threads off people with their DMD choices. I think I will but out in future!
Hi Pip, my bank Lloyds TSB do a free financial advice service, if you can listen to them and sort out the bits where they might be veering towards custom for themselves (even thought they say it’s not), they are quite informative. They don’t advise you what to do but they give you some food for thought and they calculate figures for you. I don’t know whether other banks provide this service.
Yes, ATOS obviously have had intensive training in how to sabotage peoples lives.
Does anyone know of any IFAs that specialise in helping us lot plan out our finances?
Right now I would pay for one who knows what’s what.
I shy away from the in-house team at the high street bank. They are there primarily to make a buck for their bank, and the opportunity to introduce new and existing customers to the product suite. That may be a tad harsh on the honest endeavours of such folks, but I can’t be alone here in having been sold various pups over the years.
Let’s think back…
Annuities. PPI. Libor tracker mortgages.
“They’re our most popular product! Everyone’s getting them!”
I am very sceptical of any financial product pushed by the high street.
There’s a deep history of (at best) incompetence when Big Banking latches on to a money spinner.
That nice fluffy bedside manner that many value in their neuro really should never be a consideration in your financial adviser, so please look for the the most devious shark you can find. That’s the one you want on your side.
Skel highlights my problem that everyone who gives you advise only does it in their own best interests.
Its the bl**dy unpredictability of this disease that makes things so hard. I know you have to make the choice and live with the consequences,but Ive never not had a gut reaction before.
I’ve waited 12 mnths to get to this stage and I still feel like a wibbling wreck…that is a first for me I can tell you.
My life has been one long disaster from the age of 17,but it may prove to be a best selling novel…
It has given me plenty to look back on if I end up with dementia and have to rely on long term memories to keep me happy.
I now feel for my parents and the walking liability I must of been…although I knew the boundries and was all within the law.
I think your thought of look back at what has worked is the root of my problem. When I decided to be a single parent I was totally in control and managed a home/family and full time work without ever being in debt. I liked that and felt safe.
Faced now with pension being my income for the rest of my life I still want to feel safe,but have a husband in the equation.
This is another thought, don’t take it as advice but rather something to mull over.
You don’t own your house while you have a mortgage; you own the equity that exceeds the amount you borrowed.
Paying the mortgage every month is literally “minding someone else’s business” - i.e. you are minding the bank’s business. You look after their house, and pay them for the privelege.
By paying that mortgage off (or at least substantially down) you cease minding their business, and start minding your own.
That’s worth quite a lot in terms of sense of achievement, self-esteem, getting one over on The Man and so on.
And it gives you a tangible and real asset that currently only masquerades as one.