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Stating retirment age in pension applications

I never really thought it was very important when asked to state when I intended to retire, eg at age 55, 60, 65 on personal and stakeholder pension application forms. So I tended to just put 60. In fact one person at the other end of the phone said don't worry as you can always change it. I'm 48.

BUT now it occurs to me that if I'm in a With Profits Plan, and I stated in the application I wanted to retire at 60, but then decide to retire at 55, they could potentially stick a MARKET VALUE REDUCTION on me if times have been tough in equities.

Any thoughts on this?

TIA

Jim

Reply to
RNI
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Exactly the same happened in my case.

I was at the time!

They probably could.

My pension is in a Confederation Life managed fund, they said I could retitre anytime after age 50. They didn't tell me they'd charge me about £25,000 if I did so. I'm 57 now and in poor health but given the state of the equity market, the poor annuity rates, and the charge for early retirement, retiring is not an option. Mis-selling anyone?

DG

Reply to
derek *

Hi DG,

I sympathise. Here's my strategy (subject to change) and a few words.

Firstly I despise annuities. It seems a crime that annuities pay about £6.5K on £100K, when interest rates are 5+% - but they get to keep the pot on your death. My strategy to get the best out of the system is:

  1. Anybody who does not take 25% cash is crazy. This *MAY* be further enhanced, per recent suggestion that we might be allowed to take the
25% in bits, as needed, thus avoiding a big income (and tax) in that year.
  1. After the 25% is used up, take income draw-down - even if you have less than the suggested £100K minimum for income draw down.
  2. Each year (in retirement) take an immediately vesting stakeholder pension. Send them £2808, which becomes 3600; take the 25% immediately, then an annuity paying out immediately. This actually enhances the annuity rate.
  3. Don't be concerned about the warnings re income draw-down that the pot may decline. You should have other stashes.
  4. It is essential that mortgages, car payments, etc are payed off before retirement. With time to hunt, you can get a damed decent car for
Reply to
RNI

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