What is a decent pension pot?

[Delboy]

I am thankful that on the advice of my bank, I invested a large sum of our savings, into an income bond, did not have the opportunity of an annuity.

I did this at the beginning of 2008, and although investments can go up or down, and they went down approx 30% when the recession hit, but I did not panic and thankfully they have built up again, and today the capital sum is worth more than I invested, which I have access to, and can withdraw at a moments notice, unlike an annuity.

Also during that period I have received a total income to date equivalent to 25% of the original sum invested. The only year I decided not to take an income was at the height of the recession.

Also by by keeping my income below a certain % of the value of my fund, It is not taxable.

Although I have said I, what I really mean is we, as the Bond is in our joint names, on the death of either one of us, the capital value of the bond at that time would be paid out to the surviving partner, or in the case of both of us to our next of kin, thankfully we also do not have a mortgage to worry about.

[kaymar]

I am one of the fortunate few who was in a final salary pension scheme as was my late husband which is index linked and now subject to CPI rather than RPI unfortunately. I honestly have no idea how big my pension pot was but do know that my husband's was substantial and I pay a lot of tax on it but at my time of life with no mortgage either I consider myself comfortably off - I'd be even more so if I could stop booking cruises and buying clothes and shoes

Yes, maybe, Jan, but what would be the point?

That's what I say - you never know what's around the corner - live for today

Absolutely, Jan, once you have arrived at the stage where you know you can manage, there is no point in accumulating any more. It is the uncertain future that, quite rightly, troubles youngsters like Dark Knight, however well off they might be now. We feel for them, don't we?

Carry on cruising.

[Andrea S]

Jan, You are so right , it is what that is around the corner that is frightening.

A young couple, happily married, good jobs and good health can plan for their happy ever after retirement.

That can change in an instant and at any age. As a big believer in life assurance policies I hope todays youngsters are sensible enough to ensure they are covered for all eventualities.
The earlier they can make their financial future secure will take away pressure later on in life.

[Dark Knight]

we have tried to plan for every eventuality, with pensions, life assurance ,mortgage protection, etc etc
there is a point where you can only do so much
given me retirement date is some 20 years away, who knows what I will need to have or not, as the case maybe, but I am not spending the next 20 years worrying about it
We have done all we can and needs to enough

[Gill W]

We are hoping to stop work next year.

My husband will be 65 in October 2016, but I'm nine years younger than him.

But we always have planned to retire at the same time so we can enjoy life together while we can.

I currently work 2 days a week and my husband works 4 days a week.

Neither of us want to carry on until late 2016, so we will probably stop work next spring.

We will have income from my current pension, which I took at age 50, when I was made redundant. The amount I got was enhanced due to the redundancy, and I did pay AVC's as well. My husband also has a pension which he took a few years ago - it was a guaranteed annuity rate, so it was much better than anything he could get today.

Then in October 2016 my husband will get his state pension (he also paid into SERPS, so he'll get more than the basic £144 that is due to come in) and he has another small pension he will draw. At some dim and distant point in the future I'll also get my state pension. Our mortgage was paid off in 2006 (and we live in the South!!! )

We have some savings, and some of these savings will be used for the big cruises we have looked forward to for years.

We certainly won't be rich, but we will be able to live a nice, if not lavish life. We are already putting in place plans to cut our living costs. I'm doing much more cooking from 'scratch' now, and I've invested in a bread maker (home made bread is great) a yoghurt maker and a slow cooker. We won't be having bouts of recreational clothes buying - we'll buy what we need. We hope to have lots of days out, but we'll take our own lunch, rather than eating out.

I don't know what our pension pot is / was, as I had a final salary pension, but it was nowhere near £500K. But we hope we've done enough to live comfortably. I'm hoping benefits of living a life that's not governed by work will outweigh less money coming in.

We could also downsize our house, but that is more a medium to long term plan.

If my husband wasn't older than me, I wouldn't be stopping work this early, but I feel very lucky, that, if all goes to plan I will be able to retire early.

I've never yet met anyone who says that they regret early retirement

[barney]

Like you Gill, I also managed to pay my mortgage off many years ago (also in the south) and I'm entitled to draw my work pension when I'm sixty (three years) which I fully intend to do.

We will probably buy down, house wise, and hopefully that amount difference will enable us to live the good life.

I used to have a bit of an obsession about 'leaving a legacy' for our son, but he's done very well for himself, so he'll get the house, we'll spend the rest

[Kenmo1]

Like you Gill, I also managed to pay my mortgage off many years ago (also in the south) and I'm entitled to draw my work pension when I'm sixty (three years) which I fully intend to do.

We will probably buy down, house wise, and hopefully that amount difference will enable us to live the good life.

I used to have a bit of an obsession about 'leaving a legacy' for our son, but he's done very well for himself, so he'll get the house, we'll spend the rest

That only works, Barney, if you don't have to sell your house to pay any care fees - who knows what any future governments will do to care fees, especially residential/nursing care fees.

Maureen

[barney]

All taken care of in our wills Kenmo1

A lot of folk don't know that you can mitigate against this

You've got to 100% trust your kids.

How it generally works is that each partner leaves their share (50%) to the children with a lifetime right to remain in the property for the survivor

Then neither can sell without the others permission. That includes a council trying to force it through

It can also mitigate inhertitence tax as they already own half of the property so it can't be counted against your assets

[david63]

It can also mitigate inhertitence tax as they already own half of the property so it can't be counted against your assets

Under current rules this would only apply if you do not die within seven years of setting it up.

[Kendhni]

All taken care of in our wills Kenmo1

A lot of folk don't know that you can mitigate against this

You've got to 100% trust your kids.

How it generally works is that each partner leaves their share (50%) to the children with a lifetime right to remain in the property for the survivor

Then neither can sell without the others permission. That includes a council trying to force it through

It can also mitigate inhertitence tax as they already own half of the property so it can't be counted against your assets

Barney, there is one side effect that come into play (as happened an aunt of mine).
You may trust your kids implicitly but not necessarily those that they marry. My aunt shared the house between her 2 kids (as per your post) but when one of my cousins got divorced his ex-wife came after 25% of my aunts house.

[barney]

There's always the worst case scenario in any situation but on the balance of probability, it's as safe as anything else

I'm aware of the seven year rule. We've got one more to hang on in there

I own and operate a will writing company so I'm fully aware of all the possible implications.

Now, having said that, nothing is perfect and the law is constantly moving the goal posts, particularly with older folk.

I'm away on a two day course next week to get fully up to speed with some recent changes.

Any provision made is generally better than the majority find themselves in when they die without a will.
It's amazing in this day and age that so many obviously intelligent and rational people die without making provision for their loved ones.

The lawyers have a field day. (sorry for any Lawyers on here, no offence meant)

[Andrea S]

Barney. It is a minefield and there are ways such as you have stated. Sadly as Ken has pointed out family disagreements and divorce in later years can cause problems.

Selling your home to pay nursing home fees is often a conscious choice. It certainly was in my case. My Daughter was 29yrs old and needed 24 hour nursing care. It was an impossible situation where her Husband couldn't work and be there for her, his wages weren't sufficient to pay for nursing care and if he gave up his job he wasn't entitled to any benefits. I sold my house to pay for her care and the last 2 years of her life meant she was well looked after and each weekend her husband was able to stay with her.
It is something I have never regretted doing.

[Quizzical Bob]

All taken care of in our wills Kenmo1

A lot of folk don't know that you can mitigate against this

You've got to 100% trust your kids.

How it generally works is that each partner leaves their share (50%) to the children with a lifetime right to remain in the property for the survivor

Then neither can sell without the others permission. That includes a council trying to force it through

It can also mitigate inhertitence tax as they already own half of the property so it can't be counted against your assets

Barney, there is one side effect that come into play (as happened an aunt of mine).
You may trust your kids implicitly but not necessarily those that they marry. My aunt shared the house between her 2 kids (as per your post) but when one of my cousins got divorced his ex-wife came after 25% of my aunts house.

You can't enforce the sale of the property if someone is living in it with a 50% share.

[Kenmo1]

Barney. It is a minefield and there are ways such as you have stated. Sadly as Ken has pointed out family disagreements and divorce in later years can cause problems.

Selling your home to pay nursing home fees is often a conscious choice. It certainly was in my case. My Daughter was 29yrs old and needed 24 hour nursing care. It was an impossible situation where her Husband couldn't work and be there for her, his wages weren't sufficient to pay for nursing care and if he gave up his job he wasn't entitled to any benefits. I sold my house to pay for her care and the last 2 years of her life meant she was well looked after and each weekend her husband was able to stay with her.
It is something I have never regretted doing.

Andrea - on this Mother's Day you sum up everything that is wonderful about what a Mum really is.

Maureen x

[Onelife]

Barney. It is a minefield and there are ways such as you have stated. Sadly as Ken has pointed out family disagreements and divorce in later years can cause problems.

Selling your home to pay nursing home fees is often a conscious choice. It certainly was in my case. My Daughter was 29yrs old and needed 24 hour nursing care. It was an impossible situation where her Husband couldn't work and be there for her, his wages weren't sufficient to pay for nursing care and if he gave up his job he wasn't entitled to any benefits. I sold my house to pay for her care and the last 2 years of her life meant she was well looked after and each weekend her husband was able to stay with her.
It is something I have never regretted doing.

Andrea - on this Mother's Day you sum up everything that is wonderful about what a Mum really is.

Maureen x

Couldn't have put it better Maureen.

[Kendhni]

All taken care of in our wills Kenmo1

A lot of folk don't know that you can mitigate against this

You've got to 100% trust your kids.

How it generally works is that each partner leaves their share (50%) to the children with a lifetime right to remain in the property for the survivor

Then neither can sell without the others permission. That includes a council trying to force it through

It can also mitigate inhertitence tax as they already own half of the property so it can't be counted against your assets

Barney, there is one side effect that come into play (as happened an aunt of mine).
You may trust your kids implicitly but not necessarily those that they marry. My aunt shared the house between her 2 kids (as per your post) but when one of my cousins got divorced his ex-wife came after 25% of my aunts house.

You can't enforce the sale of the property if someone is living in it with a 50% share.

In this particular case my aunt had passed 50% to each of her children (she no longer had a share in it, just living 'rent free'). My cousin's ex-wife was not interested in forcing a sale of the house ... just the value of the asset as part of a divorce settlement. I am not quite sure how it was resolved ... I think my cousin may have borrowed the money against his own house.

[Quizzical Bob]

All taken care of in our wills Kenmo1

A lot of folk don't know that you can mitigate against this

You've got to 100% trust your kids.

How it generally works is that each partner leaves their share (50%) to the children with a lifetime right to remain in the property for the survivor

Then neither can sell without the others permission. That includes a council trying to force it through

It can also mitigate inhertitence tax as they already own half of the property so it can't be counted against your assets

Barney, there is one side effect that come into play (as happened an aunt of mine).
You may trust your kids implicitly but not necessarily those that they marry. My aunt shared the house between her 2 kids (as per your post) but when one of my cousins got divorced his ex-wife came after 25% of my aunts house.

You can't enforce the sale of the property if someone is living in it with a 50% share.

In this particular case my aunt had passed 50% to each of her children (she no longer had a share in it, just living 'rent free'). My cousin's ex-wife was not interested in forcing a sale of the house ... just the value of the asset as part of a divorce settlement. I am not quite sure how it was resolved ... I think my cousin may have borrowed the money against his own house.

I think that's a 'gift with reservation' and won't save IHT:

http://www.hmrc.gov.uk/inheritancetax/p ... ildren.htm

[Kendhni]

I think that's a 'gift with reservation' and won't save IHT:

http://www.hmrc.gov.uk/inheritancetax/p ... ildren.htm

I have no idea about such things ... I just know that ownership was effectively transferred in the late 1990's (so maybe the 7 year rule will have kicked in). It was also done at the time my aunt was moving house so her new house was never really in her own name.

[Quizzical Bob]

I think that's a 'gift with reservation' and won't save IHT:

http://www.hmrc.gov.uk/inheritancetax/p ... ildren.htm

I have no idea about such things ... I just know that ownership was effectively transferred in the late 1990's (so maybe the 7 year rule will have kicked in). It was also done at the time my aunt was moving house so her new house was never really in her own name.

The 7 year rule won't start because she has retained a benefit in the house.