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Use your 'extra day' - and take the pensions leap!

If you’ve been putting off reviewing your retirement saving arrangements because of lack of time or support, why not make the most of the 'extra day' in this leap year? Earlier we had our experts on hand to answer your questions. If you didn't get an answer to your question between 1 and 2pm, we have lined up a panel of expert IFAs - including Anna - who will continue to answer your queries throughout the rest of the day.

Transcript

Host: Hello and welcome. Steve and Anna are just settling in ready to take your questions.

Steve Latto: Hi everyone!

Anna Sofat: Hi!

sharon roper:Hi i'v just been reading some of the web chats i saw John's comment on contracting back in how do you go about doing this?

Steve Latto & Anna Sofat: Anne: The easiest way is to contact your insurance company who is offering you the pension and they will send you a form to complete. You sign the form, send back to the insurance company and they will contract you back.

r.n.morjaria: i am thinking of contributing about £100000 lump sum to a stakeholder pension plan .as i am 63 years old i cant take any risks and was thinking about a cash or indexlinked fund.what company would offer the lowest charges and reasonable performance

Steve Latto & Anna Sofat: Jason: The first thing you need to think about is if you have sufficient earnings. You can get tax relief on contributions up to 100% of your earnings. If you are thinking about cash or index-linked you need to look carefully at the interest rates on offer. For example, some of the SIPPs with higher charges do offer higher interest rates and those may be worthwhile for you.

works pension: can you take pension in a lum sum

Steve Latto & Anna Sofat: Anna: Yes you can if your total pension fund is less than £15,000. If it is more than £15,000 you can take 25% as tax free cash and the balance has to buy you a pension.

Connie: What types of investment are Alliance willing to accept as eligible for a pension

Steve Latto & Anna Sofat: Steve: Within our full SIPP product we will consider anything that is allowable under Revenue rules. The main restriction applies to residential property as the Revenue impose nasty tax charges on that type of investment.

John Morgan: DWP pay pension at 4 weekly intervals would they on request change to monthly intervals on a fixed date with payments then calculated to 12 equal payments over the year ,as my other pensions pay

Steve Latto & Anna Sofat: Steve: Unfortunately, DWP only allow payments at 4 weekly intervals.

Max:i'm about to retire - shld i take my taxfree cash and invest it or is it better to leave it in my pension?

Steve Latto & Anna Sofat: Anna: It will depend on how much flexibility you are looking for. If you decide not to take it, that lump sum can only provide you with an income going forward. If you take the lump sum and invest it, you can use it to generate income but you will also have the flexibility of access to the capital if you need it.

Geraldine:Aged 53, in a final salary pension scheme paying in approx £300 per month - would I be better coming out of the pension scheme and investing in something else i.e. property?

Steve Latto & Anna Sofat:Anna: Bear in mind that your employer is also paying into your final salary pension and the employer is taking all the investment risk. Based on your service and your salary you will be guaranteed a pension on retirement and the pension is likely to be index linked. That is a good benefit to have. Investing in a property does not give you a guaranteed return. I would not come out a final salary pension scheme if I was in your position.

Mr F Fanstone:My son who is still at University will be 21 in June this year. We are considering opening a pension plan for him which he can take over at a later date. Would you recommend a Stakeholder, a personal pension or an ISA? What is the maximum that can be paid in in 2008/9.

Steve Latto & Anna Sofat:Steve: Thank you for your question. The choice between a pension or an ISA will depend on whether your son may need access to the cash before age 55 (the minimum age that he will be able to take benefits from a pension). If he may need the cash earlier, for example to pay for a deposit on a house, then an ISA may be the better option. Please remember that the pension or ISA will need to be opened in his name. Contributions of up to £3,600 gross into a pension will attract tax relief. The maximum subscription to an ISA in 2008/09 is £7,200.

Jeremy Law:I have just started a job with a Final Salary (defined benefit) pension, I make a contribution to the scheme of 4%. How much extra can I pay into my SIPP since the new pension rules

Steve Latto & Anna Sofat:Steve: Hi Jeremy. You can get tax relief on contributions up to 100% of your earnings. So you have a lot of flexibility.

Matthew:I have an an old Executive Pension plan (£95000) and have asked an IFA and my bank to advise. The bank (HSBC) advise a SIP the IFA a personal Pension. Both seem to have a good argument. Any thoughts on what I should do/who to use?

Steve Latto & Anna Sofat:Anna: Whether you opt for a self invested pension or a personal pension will depend on how much investment flexibility you are looking for and the difference in charges between the two contracts. You can these days have very cost effective SIP’s but quite a few personal pensions can have higher charges for external funds. In arriving at a conclusion, I would look at charges for the funds you want to invest in.

P M K Jones:I have an Alliance Select SiPP which was previously with Equitable,, and I am anxious to transfer the 'protected rights' part of the Plan which has had to remain with Equitable. When will it be possible to transfer the protected rights part to Alliance ?

Steve Latto & Anna Sofat:Steve: The government has annouced that it plans to change the rules for protected rights and will allow SIPPs to hold them from October this year. We plan to add this as an option from that date.

Jon from Birmingham:I use ISAs for my pension provision - is this taking undue risk and now I've started saving in that way is it inefficient to start a workplace pension instead?

Steve Latto & Anna Sofat:Steve: The big advantage ISAs have is that you're free to use the money when you want. But, you don't get tax relief on ISA subscriptions. It’s a case of weighing up whether the benefits of that flexibility are important for you.

William:How can I make sure my company final salary scheme is not in danger of being wound up?

Steve Latto & Anna Sofat:Anna: You can’t make sure that it can’t go into default, but there is a protection scheme in place, which does provide some protection if it does go into default. Most company pension schemes have to have member trustees and you can influence how the scheme is managed if you became a member trustee.

James:By how much does the lump sum I can take tax-free from my pension increase each year?

Steve Latto & Anna Sofat:Steve: Depending on the type of scheme you can take a lump sum between the ages of 50 and 75. Although the minimum age is increasing to 55 from April 2010. When you take a lump sum the maximum is normally 25% of the value of pension fund at that time.

David R - Cheshire:Through a financial pension scheme I currently pay around £140 every 4 weeks which is matched by the company - what are my best options for adding this - a seperate scheme or adding additional voluntary contributions to the pension

Steve Latto & Anna Sofat:Steve: Your options depend on two main things, firstly charge and secondly, the investment flexibility you are looking for.

Stuart S:I am 42 and have a frozen final salary pension and an existing contributory/matched Money Purchase Pension Plan opted-in with the same company, which I still work for. I also have a personal pension plan with Scottish Equitable which I make no contribution to except the SSP2 opted-out payments. How do I decide whether to change the opted-out payments back to opted-in?

Steve Latto & Anna Sofat:Anna: It is quite a difficult decision to decide whether you should be contracted in or contracted out. The key things I look at is clients attitude to risk. The less risk averse they are the more you should think about contracting back in. The other thing I look at is what other pension arrangements they have. In your case you have some final salary benefit, some money purchase benefit, so really it ought to boil down to how comfortable you are with taking risk with all the pension benefits you are now accumulating. In general terms, you should start looking to opt back in between the ages of 42 and 45.

Roger:Are traditional annuities still worth putting pensions savings into or are there better alternatives now?

Steve Latto & Anna Sofat:Steve: You have two main options with your pension fund. You can buy an annuity or you can withdraw an income directly from your fund. You need to think carefully if you want to do this as the risks here are high. If you are buying an annuity there are various options available to you. For example, there are investment based annuities available in the market.

ARTHUR BRUGGER:I HAVE A PENSION POY OF APPRX.£170,000 AND THE LAST THING I WANT TO DO IS TO BUY AN ANNUITY. I MUCH PREFER INCOME DRAWDOWN. HOW CAN I ACHIEVE THE MAXIMUM YIELD ON THE INVESTMENT.

Steve Latto & Anna Sofat: Steve: The maximum that you can withdraw is based on Revenue limits in relation to the size of the fund, not the income generated by the underlying investments. And the maximum that you can withdraw is calculated every five years. Anna: The investment yield is different from the income you're allowed to take. If you want to maximise the income into your drawdown contract then you need to look at investment generating income. These will include property funds, distribution funds and high dividend-generating companies. But don’t forget that capital growth can be used for income purposes as well.

Michael:I shall be retiring in August and I have an old Woolwich pension that is now under Barclays. It will probably have a fund value of about or just under £20,000, With the economic climate and everything I have no idea how to go about buying an annuity or which one would be best

Steve Latto & Anna Sofat:Steve: If you are unsure which annuity is best for you, you should speak to an adviser. It is very important to shop around as different insurance companies offer different annuity rates and the amount that you receive will depend on the features of the annuity (e.g. whether it will increase in line with inflation). The FSA provides a useful comparison tool in the consumer section of its website.

Martin:I wrote to the firm that looks after my company pension scheme to ask for information. They told me that as they had given me a pension forecast a few months ago I would have to pay for further informatioin. I was told it would cost about £250. Is this usual?

Steve Latto & Anna Sofat:Anna: Many company schemes now do charge for additional benefits. However, £250 seems a bit steep!

Lisa Fairfax:I am 27 and have no company scheme. I am cosidering taking out a pension plan. Once I've decided on the company to use how should I split my contributions into the various funds offered. I intend to retire at 60

Steve Latto & Anna Sofat:Steve: The first thing for you to think about is what sort of investment flexibility you are looking for and whether you want to manage the investments yourself. What is important for you to consider is the risks associated with each investment option available. For someone who has a lengthy period of time until retirement you may be prepared to take higher risk.

Tony:I have two defined contribution pension plans with my previous employer with a total value of £210,000. I am not working at the moment and as I am 51 I want to draw on these plans. As I understand it I can draw a lump sum of just over £50,000 being 25% of the value. The remainder I will use to purchase an annuity which, using the FSA's comparison tables should give me a monthly income of around £700. does this sound reasonable to you? Thanks

Steve Latto & Anna Sofat:Steve: You are correct you can normally get a lump sum of 25%. You have done the right thing by shopping around for an annuity. The main thing for you to think about is what type of annuity it is, for example, one that will increase with inflation.

Fred Gibson:a question about state pension - there is always general talk that women do not qualify for full pension but do they not get credit for years when looking after children. for example, my wife who will be 60 in august 2010 had her first child in 1972 and our 3rd child in 1984 so how many years national insurance credits accrue from this?

Steve Latto & Anna Sofat:Anna: I would suggest that your wife gets a pension forecast from DWP. There's a form called BR19 that she can complete. Given her age she can probably get a forecast online as well. The BR19 forecast will tell her, not only what she's entitled to, but the missing years and whether she's now allowed to make up for some of those missing years. In general, I think it's five years credit that the government is looking to give to women - but I would check this out.

Elaine Raphael:I took the option to apply eary for my pension as i wanted to return to my country of birthi tried on health grouds and was refused i have not worked for thirteen years. camden cunci was myl old employer.What can i do.?

Steve Latto & Anna Sofat:Steve: If you have not reached the age at which benefits can be taken from your previous employer’s scheme and you have not qualified under ill-health grounds then your options may be limited. It is probably best to speak to a professional adviser who can gain a full understanding of your circumstances and the options available.

Wendy Donald:I have sold a property to fund retirement. I plan to return to Australia. The current exchange rate is so poor I need to rethink my strategy for the time being. Australian superannuation rules are more useful to me in long run, but short term I need an investment product that will earn me reasonable interest rate. I will continue working for next few months at least until the exchange rate improves so don't need to access the interest. What products are best. I would prefer no or low cost to enter and exit and I need to know if the advisor is earning from his advice. Thanks

Steve Latto & Anna Sofat:Steve: It sounds like you are looking for a short-term home for this money and you are looking for a cash based product rather than an investment based product. You may wish to look at product comparison tables that you can find online and in newspapers for an account with a decent interest rate that provides you with ready access to your cash.

OH Bridgend:I read it’s now poss to put stocks into a SIPP without selling them and having to buy again. is that true? also, is it simple as telling pension firm which stocks ot move in and they tell the taxman, or more complicated than that? would I get tax relief as I think - hope! - this counts like a contribution?

Steve Latto & Anna Sofat: Steve: Yes it is possible to transfer an investment that you own into a SIPP. There are two ways of doing this. Firstly, your pension fund can purchase the investment from you and send you a cheque for the value of an investment or, secondly, it can be treated as a contribution and receive tax relief in the normal way. It’s worth pointing out that the process that SIPP providers need to follow for contributions of this kind is not straight forward. As a result, very few SIPP providers allow contributions to be made in this way. Those SIPP providers that allow this type of contribution are likely to charge a significant fee. You should speak to your SIPP provider to see what options are available to you and what charges will be levied.

Dale: I have changed jobs a few times in my career and have deferred pensions with all of them. SHould I seek to consolidate them?

Steve Latto & Anna Sofat:Anna: I think much will depend on the benefits you have accrued, for example if the schemes are final salary schemes from a secure employer, and the benefits are increasing at least in line with inflation, then you might not want to move the benefits. However, if they are money purchase schemes where you are taking the investment risks, then it might make sense to consolidate them. Steve: If you do chose to consolidate, you need to consider what type of scheme you move to. Again, what investment options are available and what are the charges.

wjs:Does it ever make financial sense to put off taking the state pension?

Steve Latto & Anna Sofat: Anna: It can make sense to delay taking your state pension if for example you continue to work and do not need further income. Financially the Government has made it more attractive if you do want to delay taking a pension . If you put off claiming your State Pension for at least five weeks you can earn an extra 1 per cent pension - this is equivalent to about 10.4 per cent extra for every year you put off claiming. If you did not want the extra pension, you could take the delayed benefit as a lump sum.

Trish Niblock:having lost my pension as the result of a divorce would I be wise to invest my savings off shore?divorce

Steve Latto & Anna Sofat:Anna: Not sure why you think investing offshore would make sense – the only benefit might be that you would not pay tax on any growth until you bought it back into the UK but at that point you would have a full tax liability. If you UK resident and expect to remain so, then you might want to look at ISAs and question the benefits vs the cost of offshore investing.

arthur hiscox: how many years national health contributions do i have to pay to qualify for a full old age pension

Steve Latto & Anna Sofat:Anna: If you are talking about the basic state pension currently, you have to work for 44 years as a man, but from 2010 this will be brought down to 30 years. If you are talking about the NHS pension scheme, then it is 40 years of service.

Benjamin OJIDEAGU:What is the personal Tax allowance for a 65 year old pensioner now? What will it be after 6th April 2008?

Steve Latto & Anna Sofat:The current allowance is £7,550 and is due to increase to £9,030. This is a significant change but please remember the 10% starting rate of tax is being abolished.

Mrs Margaret Meynell:I retire in 2 years and my private works pension will be under the £16K mark. Will I get taxed on all of the money if I take it as a lump sum or will 25% of it be tax free?

Steve Latto & Anna Sofat:Steve: There is a facility to take your entire pension fund as a lump sum if it is less than £16,000. 25% of it will be tax free and the balance taxed as income.

bill white:is pension credit taxed

Steve Latto & Anna Sofat:Steve: Yes! If your total income, including pension credit, is over the personal allowance.

Tony Keeling:I have about £10K tied up in an Equitable Life With Profits Pension Scheme. I have taken early retirement. I am drawing income from two defined benefit schemes. Benefit from a third defined benefit scheme will become payable within the next twelve months. The benefit from the annuity that thie Equitable fund will purchase is miniscule. On the other hand, £10K could come in useful as a lump sum. Can I free up the whole of this fund and get a lump sum? If I can, how much of it will I lose in tax payments and other fees?

Steve Latto & Anna Sofat:Anna: You can take 25% of the amount as tax free lump sum. The rest of the fund must be taken as income or used to buy an annuity. You can take upto 120% of the annuity rate for a single person applicable for your age – so you could take more income than might be possible through an annuity. My advice would be to opt for this route. You will in effect go into drawdown and will probably need to move the pension to make this possible. The charges on drawdown can be more than a normal pension and given the sums involved you might struggle to find a provider who will allow drawdown for this amount. Schemes have been set up whereby you can access the whole fund but this is not allowed under Inland Revenue rules and you would face an unauthorised payment tax of 55% plus the provider which allowed the payment will also face charges.

AllTooMuch:How can my unmarried daughter already struggling to keep up with her mortgage payments and working ten hours a day in jobs with no pension provisions now manage to save anything for later in life?

Steve Latto & Anna Sofat: Anna: Difficult question. We all have to strike a balance between our lifestyle today and making provision for tomorrow. I would suggest that she looks to make a minimal payment if at all possible because the government would top it up by another 20% from April. Also bear in mind that from 2012 she will be forced to join a pension scheme and she will have to pay 4% of her earnings into it.

JES: This Govt was re-elected, to a signifcant extent, on the promise that a pensioner wouldn't be forced to take out an annuity on their pension policies and that instead they could use a drawdown facility instead of an annuity before the age of 75 - to pass on the remaining money in their estate to their children or whoever they chose to when they died. Subsequently Ed Balls claimed that it was never the intention of the Govt to allow this, except on religious grounds post election - such as for the Plymouth Brethren. In your opinion - does the Financial Industry believe that this was truly the case been the case and has this been or should this be tested?

Steve Latto & Anna Sofat:Steve: The government has always said that pensions should not be used to pass on assets to other generations. Clearly, they have been true to their word with the nasty tax charges they have introduced. If you want to pass on an ASP fund on death please remember you can still nominate to give this to a charity tax free.

Mike:I am 51 year old and a pension fund of 125,000.If I don't put in any more money what can i expect to get when I am 65

Steve Latto & Anna Sofat:Steve: I suggest you look at the FSA website (www.FSA.gov.uk) and the pensions calculator that is available within the consumer section of its website. You can play about with the assumptions and see what you may get.

Lindsay Evans:What are the pros and cons of opting in or out of the state second pension?

Steve Latto & Anna Sofat:Anna: One of the key things to consider when making the decision is investment risk. The advantage of contracting out is that the benefit going to a personal pension which you control, you decide how it should be invested and you can take the benefits any time after the age of 50 (55 from 2010) and you can take 25% of the sum you accumulate as tax free cash. If you decide to opt in, you will get a known pension at a known age and it will be index linked. It therefore boils down to what you feel comfortable with and how much interest and involvement you are going to take in your pension provision.

Malcolm Watson:Now that the government has underwritten Northern Rock savers, what chance is there for Equitable Life savers who lost 25% a few years ago? The loss made quite a hole in my pension.

Steve Latto & Anna Sofat:Anna: None at all I am afraid.

Linda May:I have a frozen pension of 20000 an also another active pension of about 40000 when it the maturity date is reached in 2009. Can I lump them together to buy an annuity. Can I purchase my own annuity-without an advisor? Thanks

Steve Latto & Anna Sofat: Anna: Yes you can put them together to buy one annuity. You don’t have to use an adviser to buy an annuity. There are annuity comparison sites on the internet you can use, or you can go direct to the insurance companies, but it is a very big market and you might benefit from getting independent advice and piece of mind knowing that you have the best deal.

Anna:What makes a SIPP different from other investment company pensions? is there a difference in the choice of investments?

Steve Latto & Anna Sofat:Steve: SIPPs offer you wide investment choice. There are a wide range of SIPPs available on the market, for example those that allow you to buy a wide range of equities and funds and there are even SIPPs that allow you to buy investments such as commercial property. Anna: The main difference is investment choice and charges. there are a large number of so-called SIPPs which are no better than personal pensions. So I would pay keen attention to the charges.

Yvonne C:I have a stakeholder pension with my company, can i take out another pension privately and how do i know whether the yeild i get at retirement age is enough to live on. I am 33 and i really do not have a lot of knowledge about pensions, where is it best to got to for advise as this is a huge concern to me. Thanks in advance for your advice.

Steve Latto & Anna Sofat:Anna: Yes you can have a company pension and take out your own pension plan. I would however want to know why? Some company schemes have lower charges than personal pensions. You can get a pension projection quote ie how much pension you might get for a given sum saved. This will also give an indication of how much that pension would be in today’s values – this ill give you an idea about the value of the pension you are accumulating as it take out information out of the equation. A good place to learn about pension is the FSA website www.moneymadeclear.fsa.gov.uk

Colin:I received a letter from my pension company they say I opted for Asset Allocation Service as payout is due in five years time, they want to know if I want to change this

Steve Latto & Anna Sofat: Anna: I presume what they mean is that they have a service which will automatically start to rebalance your pension fund as you approach retirement – typically this means coming out of equities (shares) into less riskier investments eg gilts or cash. I would ask if this is what they mean by asset allocation service and if so, I would let them carry on with it unless you have an adviser or likely to take a keen interest and do it yourself.

Jane:do I have to take the annuity deal I've been offered? How easy it is to change afterwards?

Steve Latto & Anna Sofat:Anna: Most companies have an open market option which means you can go and buy your annuity from anywhere and I would urge you to explore your options as it can make a significant difference to the pension you might get. Once you have bought an annuity it is fixed – you cannot change providers.

Bruce Kay:I took early retirement in 2005 at the age of 52 after 36 yrs in the steel industry. My company pension is boosted by income leveling which means that I am already receiving money from my state pension. When I am 65 my state pension will be deducted from my company pension. I was advised that it was important to make sure that I paid the correct amount of NI contributions, as the full state pension amount would be deducted from my company pension on reaching 65 even if I was only entitled to part of it. I contacted the NI people in Newcastle to set up a direct debit to pay my NI stamps. They told me not to bother as they were expecting a change in the rules. They have since told me that the number of years of contributions required has been lowered from 40 years to 30. If this is correct then having paid 36 years contributions I would be entitled to my full pension on reaching the age of 65. Could you please tell me if this is correct.

Steve Latto & Anna Sofat:Steve: Bruce, the answer to your question is very simple: yes, you are correct!

DEREK:Is a personal pension as flexible as a SIPP? If not does this justify the higher charges?

Steve Latto & Anna Sofat:Steve: Many personal pensions offer a lot of flexibility but no necessarily as much investment choice as a SIPP. There are various SIPPs on the market and charges tend to reflect the investment flexibility they offer. There are SIPPs that have a decent range of investment options but lower charges. It depends on how much flexibility you are looking for.

swj:I have £2000 in a stakeholder pension. I could afford to put in £ 100.00 per month until 65.My wife's circumstances are exactly the same. We expect to recieve an inheritance of £ 65000 in four years time. Should we forget a pension because of pension credit? Should we invest the £200.00 pension money per month into a pension for our children aged 9 and 11. Should we just save all the money in an ISA, or should we do a mix of everything? Would the children save more having cash when buying a house, thus saving on the mortgage, or are they better having the money when they retire? :

Steve Latto & Anna Sofat:Anna: I would strike a balance between saving in a pension and saving outside a pension. The key benefit of a pension is the tax relief you’ll get upfront which can make a fair difference to your savings. The Government has been reviewing pensions for people on low incomes and trying to encourage them to save and not penalise. From 2012 you will have to save into a pension anyway so I would suggest that if you can afford to save now into a pension then I would seriously consider taking that route.

m: I am 55 and now live in France having just taken early retirement. Some years ago I opted out of the state pension scheme and still have SERPS. Can you please advise me what steps I should now take with the SERPS. Thank-you regards Steve :

Steve Latto & Anna Sofat:Anna: The good news Steve is that you can now take your benefits from the age of 55 – you can 25% as tax free lump sum and use the balance to buy an annuity or take an income from the fund. However, you do not have to take a pension – you can leave it invested until you are 75.

Kate Jones:In March I start my first job on a salary of 36K. I am keen to start contributing toward my pension but I can't join a company scheme for 2 years What do you advice

Steve Latto & Anna Sofat:Anna: I would suggest if you are keen on saving into a pension you should set up your own personal pension plan. You can continue paying into this even once you have joined your company scheme. Pensions are very flexible nowadays – there won’t be any penalties for stopping payments into it, or restarting it at a later age.

Lou: I have a recently taken out a SIPP and consolidated all my pensions. I am 53 and won't be formally retiring for some time to come. However, would it be possible to take out 25% of my pension fund now, even though I will not have formally retired?

Steve Latto & Anna Sofat:Steve: You can take a lump sum of 25% from age 50, even though you have retired. With the balance you must either buy an annuity or withdraw an income from your pension. But, the minimum income that you can take is zero.

Joseph:What safeguards do I have to ensure an Annuity cmpany remains financially sound. how do I get peace of mid that havibg purchased an annuity the company from which I purchased it will not go bust?

Steve Latto & Anna Sofat:Steve: Although very unlikley, if the insurance company was not able to continue with annuity payments, you would probably be able to get compensation from the Financial Services Compensation Scheme.

Alex, Rwanda:Hi. I am a British expat earning a decent tax-free UDS salary. I have nearly paid my mortgage on a nice flat in France, so I'm "propertied up". I'd like to start buying ISAs or similar but I can't as I'm not UK resident. Can you suggest a straightforward form of low-tax equities-based saving, preferably in sterling, for me? I have a private pension with Norwich Union from years ago that is "on one side", as I feel the lack of tax reclaim potential makes this no longer suitable.

Steve Latto & Anna Sofat:Anna: I would suggest that you look at an offshore bond – if you are not based in the Uk then you can invest in pretty much anything – shares, mutual funds etc. If you are Uk based then you will only be able to invest in mutual funds. The advantage is that there is no (except for a small mount of withholding tax) tax on the growth within the bond, you will pay tax when you bring back the proceeds onshore – this will depend on the tax regime of where you are living at that point.

john knight: i have a defered final salary pension as well as being a member of my current employers money purchase pension. i wish to retire in 3 years at 60, can i take my amalgamated lump sum from my current employers pension scheme?

Steve Latto & Anna Sofat:Steve: The lump sums will need to come from the respective schemes I am afraid. If you were to amalgamate the two pensions then you would be able to take the lump sum from that pension. However given that the deferred scheme is a final salary scheme, I doubt whether it would be in your interest to transfer this out.

dennis: I am 58 and a teacher and am hoping to retire shortly - do I have any options as to how I can use my accrued sum in purchasing an annuity.

Steve Latto & Anna Sofat:Anna: If you are a member of the teachers pension scheme the best course will probably be to take the pension from the scheme. However, technically you are allowed to take a transfer into another arrangement and you could buy your annuity on the open market. Do remember the teachers pension is usually index linked, and if you were to buy an index linked annuity that is going to cost you a considerable amount – roughly the cost is about 50% of a normal annuity. For example, £100,000 lump sum may give you a level pension of about £6,000 a year, but an index linked pension of about £3,000 to £3,500 per year.

JAne:My friend is getting divorced from my husband - she gave up work to bring up their child and her stepchild, is she entitled to part of his pension?

Steve Latto & Anna Sofat: Steve: It is possible for a pension to be shared on divorce. Although this would need to be taken into account as part of the overall divorce settlement.

Robin: Your investment choices of ETF's are wholly inadequate compared to your compettiors. e.g noting for gold silver and other commodities! Will you be adding to the chioces and if so when?

Steve Latto & Anna Sofat: Anna: I am not sure who are talking about but there are a number of ETF providers now – ishare from BGI, Luxor from Soc Gen, dxtrackers from Deutsche bank, ETF securities etc – Luxor and ETF securities have more commodities, gold and alternatives than the ishare or dxtracker.

Host: Unfortunately that is all the time we have for the webchat. However, we have a panel of IFAs on hand all afternoon. So if you have any further questions click on the red link at the top of chatpage and submit your question to our team of experts.

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