How to get the cash out of your Pension

[arabela]

wow! its intersting website to all of us.
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[WolfattheDoor]

I am looking at the forms now to decide what to do. At the moment I am unemployed but looking for work. Does anyone know what it means if I take the tax-free sum and annuity? It talks in the forms about me "retiring" but I still want to carry on working (just not paying any more into the pension). How does all this effect tax, NI, etc?

[snow hope]

I am looking at the forms now to decide what to do. At the moment I am unemployed but looking for work. Does anyone know what it means if I take the tax-free sum and annuity? It talks in the forms about me "retiring" but I still want to carry on working (just not paying any more into the pension). How does all this effect tax, NI, etc?

Hey wolf, I think you may need to take some professional advice - why not try the CAB?

This is not advice, but just some thoughts to check into. If you are unemployed, you may be getting a benefit. This may stop if you "retire". Although "retiring" does not prevent you from doing any work or a regular full-time job as far as I know.

Personally I would maximise the lump sum you can take. I believe this is tax free - check this. An annuity is something you can purchase from many different insurance companies and this is what will provide your pension. The amount you get annually will be taxable. Annuities can be inflation/index linked (you get a lower regular amount in this case) or not. If inflation takes off, your annuity pension may devalue very considerably over a few years (if not inflation linked). On the other hand if your annuity company went bust after a few years what would happen? A bird in the hand is worth two in the bush......

Not sure of the NI position.

Be careful - this needs a lot of thought. Your decisions now are likely to be non-reversible..... take advice and good luck!

[WolfattheDoor]

Thanks Snow. I think I shall have to try and change my financial advisor. When I started the pension, I was in Peterborough and now I'm in Devon which is a long way to go to have a chat with him.

[Tangata]

Has anyone looked into transferring an existing pension fund into a SIPP and investing some or all of it in gold? This website seems to imply that it can be done

http://www.goldassets.co.uk/research/go ... ension.php

You dont get to touch the physical gold, its held by The Perth Mint in Western Australia.....

I'm going to investigate it further.... Any thoughts?

[caspian]

I believe there is a substantial penalty for withdrawal before you turn 65. I don't think it's ever a good idea to touch retirement money. It should be there for retirement and I'm sure you'll need it more when you are old and retired, than right now.

On the other hand, x% or zero is still zero. Why do you assume that pensions will even exist when you turn 65? (Assuming you're nowhere near that point yet.)

In the event of a complete financial armageddon, which doesn't seem so far-fetched any more, a pension pot may well end up worthless. Since an expanding economy appears to rely to a large extent on cheap supplies of energy, how are traditional investments going to keep growing?

[PaulS]

Back to pension rescue plans:

Back in 2005 we transferred our 3 little pension pots to SSAP and then invested that in agri land, which we now farm. That has worked out very well, but there was always a problem in that you needed to employ a 'pensioneer trustee' and later an 'administrator', who required some £1000 per year for their very limited services (in our case no services since no transactions have been taking place). Although we negotiated this figure down to £600 per year, it was still a nuisance to have to come up with that amount and deplete the limited cash reserve the SSAP plan had.

But now there is a solution.

Now such a scheme can be self-administered. As a result I had great pleasure in writing a letter to our 'administrator' sacking them from that position and installing myself as the new administrator of our pension scheme at zero cost. We just have to make an annual return (on-line) which will probably be identical from year to year as we have no plans to make changes - a doddle and free to boot!

So if you are still part of a traditional pension scheme you might like to consider setting up a SiPP or SSAP (cost about £1000), have it run bu a professional administrator (cost about £600-1000) per ya er) for couple of years, then sack them once you are sure what needs to be done and how - and you end up being able to invest your pension cash pot in whatever venture (within certain limits) you think is best - with no annual cost.

Could the scheme invest in renewable energy? Not sure.

[Blue Peter]

Very interesting.

Do you, as the renter? of the land from the fund have to pay the fund each year? How much do you have to pay? and how is it decided?


Peter.

[PaulS]

We should pay, but have done so only once of the past five years. If and when we start earning more than we need to live on, we may decide to restart or even catch up, and then perhaps buy more land through the scheme as and when the money accumulates.

There appear to be no rules on the rent levels - at least nobody has chased us on this. But remember I could always offset any rent against my 'administration' charges.

Currently we are in the process of adding our two sons to the scheme. Both are working and contributing to traditional pension schemes, plus the employer contributions (which in the case of one of them who is employed as civil servant, are substantial) - and all that will hopefully start accumulating in the the scheme to be used to either start paying out a small pension or to buy additional land to farm.

[Tangata]

I've been thinking about this since this thread first began 3 or 4 years ago.... pity I didn't act a bit sooner as we all know whats happened to gold prices since then.

I have a work based pension which I've kept paying into over the last 10 years simply because my employer matches my contributions. I moved it out of equities in around 2005 and whilst it's not made me a fortune, it's not gone down.

My employer is now changing its pension provider and I have the choice to move my pension to the new provider, leave it where it is, or move it to a completly different provider.

I'm seriously thinking of opening a SIPP with Pointon York. They do a Single Investment SIPP and are OK investing in Bullionvault. Fees are a one off setup fee of £160 and then £630 a year +vat (whatever the size of the fund) this is more than the fee I'd pay with my employers pension provider.... but I just dont trust even the supposedly 'safe, conservative' fund options that it offers.

I can either just put in a lump sum, or I can make monthly contributions which can be 'drip fed' into Bullionvault as and when I choose.

My girlfriend thinks I'm mad, and cant understand why i "cant just do things 'normally' like everyone else." I must admit, I am a bit concerned that gold is at an all time high. But then again I was concerned 4 years ago that gold was at an all time high then too!

Has anyone else thought about doing or actually done anything like this?

[Lord Beria3]

Hello Tangata!

Glad to meet somebody here who understands the logic in investing in gold!

I brought some gold with Bullionvault nearly 2 years ago now (its up nearly 50%) but I didn't buy it for profit but for protection (either a UK banking collapse and/or hyperinflation).

Reading around the subject, I think that gold will carry on rising in value at least for the next 2 years. I recommend this podcast for the general picture with PM

http://www.financialsense.com/financial ... ers-market

My personal opinion is that within the next 2 years gold will hit around $1800 - after that who knows? There is a risk that high interests by central banks will lead to a major correction in gold prices but as I have brought gold for safety rather than profit, it doesn't bother me too much.

The general picture in terms of deficits in the developed world leads me to think that either we have sustained levels of high inflation in the coming decades (stealth default) which will keep gold high or any attempt to spike interest rates and kill of inflation will lead to deflationary pressures and mass bankruptsy. This will lead to a further wave of QE - so any drop in gold will be made up by even greater rises after QE4/QE5.

My best advice is to carry on buying on dips into something like Bullionvault in the long run. Don't put more than 30% of your overall wealth into gold and try to diversify into other things as well.

Hope that helps

[emordnilap]

My girlfriend thinks I'm mad, and cant understand why i "cant just do things 'normally' like everyone else."

Tangata, you are not mad. It's being 'normal' (sometimes called popular, common, etc etc) that has the world in its current mire.

I've no comments on gold investments nor have I read your other posts but I'm interested in people who question 'normal'.

[kenneal - lagger]

Are you going to use the gold as ballast for the boat on your trip to Oz, Simon? You'd better stay well away from Somalia!

[DominicJ]

In what can only be deemed bizare, my "Recovery Fund", designed to maximise profits during recovery from a crash, just crashed, whereas my commerical propery holdings have done ok, overall, I've lost the tax savings a bit of the employer contribution.
Suppose it depends how long extend and pretend goes on for.

Anyway.
If you cant invest in Residential Property, does anyone know if you can invest in a Ltd that owns residential property? No reason I cant sell my house to myself.
Assuming thats a bust, likely is, what scope is there for investing in other Ltds?
A friend is thinking of buying a garage....

[woodpecker]

If you're young it's probably worth taking a punt on gold with some of your money.

If you're within 10 years of retirement, I'd be very wary, unless it's a small sum.