Un-used private pension reclaim

[Shadow2981]

Wow, I have only just noticed there is a pension thread on here! AAD really is the one-stop-shop

Ok, a few weeks ago, the missus' old man asked me if i knew of any way to get your money out of a pension scheme that had been sat unused for quite some time.

I had never heard of it being done, but he has a healthy chunk in there, but it is only worth pennies at retirement! He wants it out, its too late for him to make further contributions to get a worthwhile return, way more than he could afford.

We found some companies claiming to be able to release up to 50% of the funds, but when he spoke to them, they didnt appeal...

Is there a way, like PPI and charges to get any of the money out?

Thanks

[Never-In-Doubt]

Re: Un-used private pension reclaim

We have a few insurance peeps post on here, however I think with pensions it's not like that.....

I thought (I could be wrong) that all you could do was transfer it to a new provider, you cannot access cash until a set age (used to be 50/55 IIRC). A SIPP is different but similarly, not sure on earliest release age.

[Shadow2981]

Re: Un-used private pension reclaim

Well he will be 50 in August, so perhaps he could try find one that allows a lump sum withdrawal to transfer it to at 50.. I didnt think it worked like that, i know with mine the only conditions i can withdraw it are if i am given 12 or less months to live, or if i die pre-retirement age (in which case next of kin can withdraw it). The consultant made that very clear.

[oscar]

Re: Un-used private pension reclaim

Niddy is right with 55 for a private pension. Also in that it can only be transferred between funds / employers etc. As far as I am aware, he will be able to take it as a lump sum when / if he does retire at 55. This is based on the fact that there would be no value to the actual pension.

There was talk (pre Gen Election) that pension pots were going to made available to those that needed to - ie to pay off debt (yeah right! ) etc, but couldnt be used just to live the high life. How they would be able to stop this once the money was in your account I have no idea.

However, talk is about as far as it got, nothing happened after.

[Shadow2981]

Re: Un-used private pension reclaim

That was my first opinion of it to be honest, but as i said, not something ive ever looked into... I started my first one less than a year ago lol... Im crap at saving, so i figure its better to have a little at the end than nothing :/

[vossy]

Re: Un-used private pension reclaim

Niddy is right with 55 for a private pension. Also in that it can only be transferred between funds / employers etc. As far as I am aware, he will be able to take it as a lump sum when / if he does retire at 55. This is based on the fact that there would be no value to the actual pension.

There was talk (pre Gen Election) that pension pots were going to made available to those that needed to - ie to pay off debt (yeah right! ) etc, but couldnt be used just to live the high life. How they would be able to stop this once the money was in your account I have no idea.

However, talk is about as far as it got, nothing happened after.

Yeah I looked into mine and at age 55 you can draw 25% tax free but must buy an annuity unless you have a terminal illness, at age 60 you can draw the whole lot IF the entire fund is 18k or less, 25% would be tax free and the rest at normal tax rate.

Not an expert but I spent months on this last year. Annuities are worthless at the moment.

[Shadow2981]

Re: Un-used private pension reclaim

Oh bummer, his lump sum is over £20k. Can he transfer say £10k into one, and the remainder into another, and withdraw both in a few years? Or is that too obvious a loophole?

[vossy]

Re: Un-used private pension reclaim

Oh bummer, his lump sum is over £20k. Can he transfer say £10k into one, and the remainder into another, and withdraw both in a few years? Or is that too obvious a loophole?

I don't know - seems too obvious doesn't it? The whole pension thing is a nightmare, what makes it worse is that when I signed up to mine I should have been able to take the whole lot out at age 55 then the bloody gvt steps in and changes all the rules and I can't sue 'em for breach of contract - cheating load of barstewards, just shows where all the tossers have their money tied up

[SXGuy]

Re: Un-used private pension reclaim

also bare in mind if hes still working and if he can get it released, he will be taxed on it

[mgfboy]

Re: UN-used private pension reclaim

You can only ever draw 25% of the pension as a tax free lump sum unless it was and old RAC ,EPP/SSAS or section 32 buyout bond (even in those cases it would be unlikely to get much more). Also Vossy is correct about commuting trivial funds and terminal illness, their are also rules that come into effect if you die before purchasing and annuity.

You can transfer the amount into another pension pot , but you dont have to buy an annuity , you can go into other types of contracts if you require ( drawdown etc).

Unfortunately though, pensions are quite simple, you have to pay a lot in to get a lot out. There is no magic to it , very few people though have the discipline to do it unless they where in a company/government back scheme which makes them.

[vossy]

Re: Un-used private pension reclaim

As my piddling little bit is just under the 18k rule I am leaving it there until I am 60 so I can have it all back albeit having to pay the tax, as it is now paid up and it is not attracting any interest so I should be okay - if I live that long, otherwise I suppose Mrs Vossy will be out on the town

[kuma]

Re: Un-used private pension reclaim

Be careful, some companies say they can release your pension early. Do a little googling. (it's not good)
you either lose your money all together (when they move it overseas) or you could be left with a large tax bill.
As above you can release 25% at age 55 (was 50 a few years back)
I thought of getting some of mine back and clearing my debs, researched and after reading the warnings and stories of others that had done the same, was put off.
I decided I can wait another couple of years and just take the 25% then.

I had my pension statement the other day..It had grown by 13.8% since last year.
At least some companies are doing ok...it does piss me off that it costs me 1.5% just to have someone look after it.

kuma

[ken100464]

Re: Un-used private pension reclaim

Was a good year last year as my pension grew alot too.

However the downside was the previous couple of years it was shrinking.

Overall the last 4/5 years have been one of just standing still. They have shafted us over just about everything we ever did/do/or might be thinking of.

[mgfboy]

Re: Un-used private pension reclaim

Yeah I looked into mine and at age 55 you can draw 25% tax free but must buy an annuity unless you have a terminal illness, at age 60 you can draw the whole lot IF the entire fund is 18k or less, 25% would be tax free and the rest at normal tax rate.

Not an expert but I spent months on this last year. Annuities are worthless at the moment.

Thats only true in parts , yes you can only draw 25% in cash but you dont have to buy and annuity there are other options such as draw down etc.

As for annuities being worthless, not sure quite what you mean by that. I must admit there is more bollocks spoke about pensions than any other subject on our beloved forum

[helmsman]

Re: Un-used private pension reclaim

Thats only true in parts , yes you can only draw 25% in cash but you dont have to buy and annuity there are other options such as draw down etc.

As for annuities being worthless, not sure quite what you mean by that. I must admit there is more bollocks spoke about pensions than any other subject on our beloved forum

Hi,
Just read the thread and pensions are a nightmare for most of us, but I will tell you a story, had 2 works pensions 1 with 15 years and 1 with 10 years of contributions ie 1 1970 to 1985 1 1990 to 2000, the first one I cashed in when I was 50 thru (Berkely Jacobs tele add) they got me £8000 cash + £650 every Sept (needed the money) a few years later I got a letter saying did I think I was given bad advice obviously I said yes, a couple of months later I received a letter saying the advice I was given was ok thought no more of it, a year later I received a letter from Berkley Jacobs offering me a lump sum of £11800 or an amount every year as full settlement, £11800 was received by cheque a couple of weeks later (thanks very much). Then I cashed my next pension last year at 60 received £11000 cash lump sum + £1700 per year (every June so we have a holiday). Have no Idea if I did the right thing in cashing them but at least we had the benefit, now my inlaws had a good pension then father in law died and my mother in law gets a pittance now.