If you have a work pension scheme check if they have an ill health retirement option. Some of the old ones do. If you have a final salary pension you can retire from 55 onwards. I took one of my pensions early took 25% tax free and a monthly pension. My other two pensions are defined contribution so I will be converting them to draw downs. Also check life insurance old policies pay out on a diagnosis of a terminal illness new ones need you to be diagnosed with less than 12 months to live. I was lucky my old life insurance cleared my mortgage and we then downsized to a smaller place freeing up enough cash to live on till I can get my state pension. It won’t be a luxurious retirement but we won’t have to worry about bills so it’s good enough.
Check out your occupation pension if you have one. There maybe a provision. Also check out gov uk site for people like us. I retired about 8 Years ago at 52. My pension kicked in just 8 Months ago when I turned 60. This will go to my spouse when I die. Between 52 and 60 i lived off savings. Best decision Ive made as I gained 8 years of stress FREE living on my terms life. Time I will never see again but though financials were limited. You cannot buy time or contentment......best wishes
If you convert to drawdown you don’t get a pension or spouses pension I believe. I had one final salary pension which had a spouses pension attached. I discovered that my pension was approx £7.5k per annum with the spouse pension being £3,8k. If I took 25% tax free (40k) my pension dropped to £5.5k but the spouses pension stayed the same. So I took the £40k as I don’t think I’ll be claiming the pension for 20 years. The defined contribution schemes usually just give the pension pot to the spouse or nominated person upon your death from my experience.
Thanks for all the helpful comments, it is useful to know what sort of things I need to look into.
I have been speaking to Citizens Advice at my local cancer centre, they have advised me to speak to my union about the specifics of what is available from my work pensions. I have two very small pension pots, but they are both with what I believe are relatively generous schemes (University and NHS) I will probably take the maximum lump sums, I think I should be entitled to the enhanced ill health retirement benefits, but hopefully my union will be able to clarify that.
Citizens Advice spoke to me about benefits, but I don't think I need to access those at the moment.
Fortunately my husband has a good pension already and our mortgage is paid so I don't need to worry about him financially.
I didn't have a work pension because I was self employed for 33 years but when I first started self employment I decided to pay into a pension scheme after taking advice from an IFA. He was a friend then although I rarely see him now but I trusted him. Not many people had private pensions at the time and about 10 years later I took out another one.
So when I was experiencing crippling back pain and I had to move into a wheelchair, I had to stop working and I decided that I was going to take the smaller of the two pensions. I took advice from my IFA, I rang the pension scheme company directly and I also had free pension advice from PensionWise. That is set up by the government and the advisors are bona fide IFAs. As it's free I thought, why not?
Well, I discovered that for me, and I think it's the same for everyone, if I take a defined monthly payment and I died in a few year's time, the amount that is left also dies too. My spouse gets nothing.
However, if I decided to take a Drawdown agreement, the money that is left goes directly to my wife. For me, with an incurable cancer diagnosis, that seems the best Idea. The first 25% of the money is tax free and then the rest is taxable at your normal tax rate. The money that is remaining after I take a lump sum is still invested in the same scheme so it continues to grow (hopefully).
Good luck Sal in your decision,. I hope it works for you.
Hi Tvman, thanks for this. I have a very patchy employment history, and before it become opt out rather than opt in I often made no pension contributions at all, I have a tiny private pension, I will certainly be looking into drawdown for that as it's worth less than £10 a month, as I'm over 55 there is no issue with taking it now.
My university and nhs pensions will pay a half rate to my husband on my death, but they are both small as well, i need to see if it is worth or possible to take a lump sum and forfeit the after death payment's. At the moment I think he would be better off if I died before retirement, but that isn't my plan!
