magazine archive
magazine archive
Ask Tom
A big thank you to readers as our pensions' expert passes the baton
Thursday 11 Jan 2024Dear readers, After six years answering your brilliant (and often challenging) questions, I have written my final Ask Tom. I will remain at AJ Bell as director of public policy but my fantastic colleague, head of policy Rachel Vahey, will now be the one responding in these pages. When I first...
How does pension drawdown work and can I vary withdrawals?
Thursday 21 Dec 2023Please could you explain how pension drawdown works? Instead of taking 25% tax-free lump sum in one go, is it possible to take a smaller amount tax free (e.g. 4% or 5%) per year over the course of several years, thus leaving part of the tax-free amount still invested until I need it? Am I allowed...
Should I invest my Christmas bonus in my pension?
Thursday 14 Dec 2023Our staff all got a bonus earlier this week as a nice surprise from our CEO. It totals £500 and I want to put it towards my pension. I’m only in my 30s, but I didn’t save much towards my pension earlier in my career and I’m determined to put that right. Obviously usually, you get tax advantages...
I'm fed up with high pension costs: should I switch provider?
Thursday 07 Dec 2023My husband is aged 69 and does not plan to retire until he is 75. He has had a ‘with-profits’ personal pension plan since 2004. The current plan value (excluding the final bonus) is £127,116, the final bonus (which they say they can’t guarantee) is £72,319 and the market value reduction is £5,657...
What do plans for a ‘pension pot for life’ actually mean in practice?
Thursday 30 Nov 2023I’ve seen Government plans for people to have one pension pot for life instead of different ones for each job. What has been proposed and should I wait for the changes to be implemented before consolidating my existing pensions? Anonymous Tom Selby, AJ Bell Head of Retirement Policy, says: The ‘pot...
What are ‘Investment Pathways’ and how do they affect my pension?
Thursday 23 Nov 2023I’m planning to enter drawdown in the next six months and have read I’ll be offered an ‘Investment Pathway’? Can you explain exactly what this is? Daniel Tom Selby, AJ Bell Head of Retirement Policy, says: Since 2021, hundreds of thousands of people who choose to keep their retirement pot invested...
Should I defer taking money from my defined benefit pension?
Thursday 16 Nov 2023I am 59, earn £90,000 a year and have a small defined benefit pension that matures in five months. It will pay me £22,000 a year (or £114,000 in cash and £17,000 a year). I’m still working so don’t need the income now. If I defer, they will add 4% to the value of my pension income for each year...
Should I adopt an extreme savings approach to let me retire early
Thursday 09 Nov 2023I’ve been reading about the FIRE (Financial Independence, Retire Early) movement recently and the idea of retiring early is pretty appealing. What are the pros and cons? How easy is it to enjoy a decent standard of living if you retire at, say, 55? Anonymous Tom Selby, AJ Bell Head of Retirement...
I'm struggling with the bills – am I eligible for pension credit?
Thursday 02 Nov 2023I am 75 and live alone. I get the basic state pension – alongside a very small private one – but am struggling in the cost-of living. Though I own my house, the increasing cost of food and other basic items mean I’m some weeks finding myself in negative budgeting. Could I be entitled to pension...
Might we see changes to the triple-lock state pension system in the future?
Thursday 26 Oct 2023I am in my 30s and each year I’ve seen the triple lock policy means that the state pension goes up by quite large amount – often by more than my salary. I’m not against the state pension going up, but I wonder if I will ever see the benefit that those in their 60s and 70s are seeing now. How long...