Final salary pension gone - options

[falkster]

This week my company has withdrawn our final salary pension scheme due to massive deficit.
I'm only 36 but I'm starting to worry about my retirement. The new scheme means I lose £17k per year when I retire.
My new thought process is to cut myself as tight as I can for the next 4-5 years to get my mortgage paid off then either get a couple of flats or a house to buy so atleast I'll have my pension and something (that will hopefully go up in value) that I can get income from or sell for my retirement.
Any other options I can look at?
I don't want to be minted so I get taxed to death but I don't want to be worried about whether or not I can afford to switch the heating on!!
Thanks

Edited by falkster on Thursday 14th October 18:10

[JohnP68]

musclecarmad said:

falkster said:

This week my company has withdrawn our final salary pension scheme due to massive deficit.
I'm only 36 but I'm starting to worry about my retirement. The new scheme means I lose £17k per year when I retire.
My new thought process is to cut myself as tight as I can for the next 4-5 years to get my mortgage paid off then either get a couple of flats or a house to buy so atleast I'll have my pension and something (that will hopefully go up in value) that I can get income from or sell for my retirement.
Any other options I can look at?
I don't want to be minted so I get taxed to death but I don't want to be worried about whether or not I can afford to switch the heating on!!
Thanks

Edited by falkster on Thursday 14th October 18:10

so, you stop benefitting from future accruals but your entitlement up to now is preserved. They will prob offer a money purchase scheme which you can contribute to.

Do you work for Asda? If so the 25% payment you get could go straight into a private pension and you won't have to pay tax on it!

...but you probably won't be able to touch the money until you retire, and when you do, 75% of it will be taxed as income

[anonymous-user]

I assume that they are going to offer to give you a % or your salary to allow you to make your own arrangements? Mind if I ask how much? I went through this a few years ago and my dad is going through it now. The difference in % offered was quite large.

P

[falkster]

MRSNEAK said:

I assume that they are going to offer to give you a % or your salary to allow you to make your own arrangements? Mind if I ask how much? I went through this a few years ago and my dad is going through it now. The difference in % offered was quite large.

P

We are getting 25% of our salary as an ex gratia payment which is meant to be a softener but that only just covers one years short fall.
Ive come up with a couple of thoughts. Ive already spoke to my mortgage lender and am able to pay my house off in the next 4 years but rather than wait until then I am going to buy another house, whilst theyre still low, on an interest only mortgage then after mine has been paid off I will change that to repayment or get another one.
This way I have income from one or two houses as well as my pension!
Its a lot to think about for an immature 36 year old.

[anonymous-user]

Will they also be giving you a monthly % of your salary to allow you to do as you wish? Or is the 25% a full and final payment?

[Beardy10]

Are you maximising your ISA allowances ? If so I would recommend that as a first priority. No tax break on the way in but you don't pay CGT and you can draw an income tax free.

I believe I am right in saying that once the money is in an ISA that you are not subject to a future change in legislation ? Which is obviously the big problem with pensions.......

Edited by Beardy10 on Saturday 16th October 21:31

[Cogcog]

I wonder if the public sector will do the same? I had imagined that they will simply close their programmes to new members and then a future chancellor would have to suck up the problem when those owed their pension had nobody paying in to fund them.

[Beardy10]

Cogcog said:

I wonder if the public sector will do the same?

They will have to, the sums just don't add up.