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Pension Strategy

07 Oct 2017, 20:22

I am in my mid-forties and I hope to retire at 55,I have 17 years final salary and 10 defined benefit plus an AVC.
Would it best just to drawdown the new defined contribution pension scheme until I am 60 and then take the other pensions when I turn 60.
I can't see me building up much more than £75000 in the new scheme by the time I am 55 so I would be looking to drawdown all of it up to age 60.


Pension Strategy

08 Oct 2017, 08:14

Pensions can be very individual things based on your own circumstances and it’s impossible to say if that’s the best thing to do without knowing a lot more detail of your overall financial situation.

But for what it’s worth, I’m planning on doing more or less the same as you suggest.
My main scheme benefits are not enough to retire on alone, but I have a sizable amount in AVC’s and will still be able to retire at 60 quite comfortably. Therefore I see the new scheme from 2018(whatever it turns out to be) along with a personal pension I already have, as a way of funding early retirement from 55.

While DC pensions are rubbish at providing an income for life due to low annuity rates, in my opinion they’re actually quite good for either topping up a DB pension until SPA for example, or for funding early retirement before a DB scheme kicks in. But whether that applies to any individual will always come down to circumstances!

Based on the current Personal Tax Allowance of £11,500 per year and no other income, it’s actually possible to take a tax free income of around £15,332 per year from a DC pension. With the first 25% of that being tax free and the rest just below the PTA.

My advice would be to take advantage of the employer contributions along with the tax breaks. Make sure you manage the money well and preferably not pay any tax on it, and give yourself an earlier retirement. As long as it’s the best thing for you!

Pension Strategy

08 Oct 2017, 13:36

RobertT wrote:Pensions can be very individual things based on your own circumstances and it’s impossible to say if that’s the best thing to do without knowing a lot more detail of your overall financial situation.

But for what it’s worth, I’m planning on doing more or less the same as you suggest.
My main scheme benefits are not enough to retire on alone, but I have a sizable amount in AVC’s and will still be able to retire at 60 quite comfortably. Therefore I see the new scheme from 2018(whatever it turns out to be) along with a personal pension I already have, as a way of funding early retirement from 55.

While DC pensions are rubbish at providing an income for life due to low annuity rates, in my opinion they’re actually quite good for either topping up a DB pension until SPA for example, or for funding early retirement before a DB scheme kicks in. But whether that applies to any individual will always come down to circumstances!

Based on the current Personal Tax Allowance of £11,500 per year and no other income, it’s actually possible to take a tax free income of around £15,332 per year from a DC pension. With the first 25% of that being tax free and the rest just below the PTA.

My advice would be to take advantage of the employer contributions along with the tax breaks. Make sure you manage the money well and preferably not pay any tax on it, and give yourself an earlier retirement. As long as it’s the best thing for you!


Thank you Robert T, it looks as if we are now going to have to be proactive and a little creative when it comes to taking our Pensions.

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