Pension Pot

[andyhinch]

3 ?

3 bottles with my looks.

 

[Bigg Bigg Blue]

3 bottles with my looks.

Beauty is only a light switch away

 

[BeerIsTheBest]

I think you mean final salary or defined contribution. Defined benefit is the same as final salary.

TommyCP. Quite right my friend. My mistake.

 

[manchester blue]

I got a statement for one of my old employer pensions, only with them for a short while so the statement says it's worth just under 3k, there's a tab that says 'take your pot' or similar, does that mean I can just take the cash now? I'm 62 so am unsure if I have to wait until I'm 66, would rather have it now if given the choice.

Yes you can. It’s a “small pot pension” and you can take it now.

Edit - already answered but to add it’s very straightforward.

 

[blue_paul]

Hypothetically, if I was to put a 100k net inheritance into a pension for 20 years, what sort of figure would that amount to after that period?

 

[GornikDaze]

Thanks very much mate, that's helpful and good to know. I've no idea of the answer to your points about Final salary etc but will speak with them on Monday for clarification. The previous employer retired and sold their business, I was TUPE'D and put into a different scheme with the new employer. I'm no longer with them either and have also received a statement from their preferred provider, the original one was NEST, the latest one was People's Pension, in total I was only paying into each one for a couple of years each, I think it was since they became obliged to do it for employees.
Spent most of my working life self employed/sole trader, so unfortunately pensions were always bottom of the list of things to do, such is life.

Thanks again for bothering to respond.

If you have paperwork from NEST and PP they are definitely not final salary pensions. You will be able to take them as lump sums subject to tax etc as others have posted

 

[Citizen of Legoland]

Hypothetically, if I was to put a 100k net inheritance into a pension for 20 years, what sort of figure would that amount to after that period?

Some of the pension websites have their own calculators so would be the best place to start. It depends a lot on your approach to risk so that’s the first thing to assess. If you’re ultra cautious then you’ll be looking at 1 to 2 % growth per year, so that pot would end up at £150k. At medium risk then you may get around 4% making a final pot around £220k. You could go riskier and get more but you should probably seek advice on that. Generally the idea is to perhaps move towards less risky investments as you near retirement age but not too risky at the start that you lose the lot early on. These figures don’t allow for inflation though and that’s going to be an issue for a while.

 

[trumpton]

Hypothetically, if I was to put a 100k net inheritance into a pension for 20 years, what sort of figure would that amount to after that period?

It would amount to about 12 months of gas and electric and one tank of diesel.

 

[blue_paul]

Some of the pension websites have their own calculators so would be the best place to start. It depends a lot on your approach to risk so that’s the first thing to assess. If you’re ultra cautious then you’ll be looking at 1 to 2 % growth per year, so that pot would end up at £150k. At medium risk then you may get around 4% making a final pot around £220k. You could go riskier and get more but you should probably seek advice on that. Generally the idea is to perhaps move towards less risky investments as you near retirement age but not too risky at the start that you lose the lot early on. These figures don’t allow for inflation though and that’s going to be an issue for a while.

And then taxed on it heavily too? Doesn’t sound great after 20 years, no wonder everything is going in to real estate or crypto

 

[dickie davies]

Some of the pension websites have their own calculators so would be the best place to start. It depends a lot on your approach to risk so that’s the first thing to assess. If you’re ultra cautious then you’ll be looking at 1 to 2 % growth per year, so that pot would end up at £150k. At medium risk then you may get around 4% making a final pot around £220k. You could go riskier and get more but you should probably seek advice on that. Generally the idea is to perhaps move towards less risky investments as you near retirement age but not too risky at the start that you lose the lot early on. These figures don’t allow for inflation though and that’s going to be an issue for a while.

If the 100k was invested gradually into a fund at say 2k per month, then surely it attracts the 25% tax relief top up, so 2k immediately becomes 2,500

As you say 100k at 4% over 20 years is 220k ish, but it becomes a very much more complicated calculation if invested gradually when adding the tax relief, plus all the advice is to spread out the investment as it is far more beneficial