Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    Lynsab
    Can I draw out ALL my pension?
    • #1
    • 9th Jan 10, 12:54 PM
    Can I draw out ALL my pension? 9th Jan 10 at 12:54 PM
    Hi Newbie here

    I have two small works pensions which were 'frozen' some time ago after moving on in jobs etc.

    Both after finally tracking them down thru the pensions service are worth approx 12k each so even with a lump sum payout will pay approx 500 per year.

    Am I allowed to take ALL of the funds out? I have been trying to find out IF there is a limit on low pensions and cannot find it, but I would like to re-invest it elsewhere for the next ten years. I don,t wish to put it in another pension either, it will go offshore.

    I have asked both companies involved and I never get a straight answer, so would like to know if its possible before I continue on.Btw I am 57 and Live in sunnier climes now too

    Thanks in advance
    Last edited by Lynsab; 09-01-2010 at 12:57 PM.
Page 1
    • nearlyrich
    • By nearlyrich 9th Jan 10, 1:03 PM
    • 13,039 Posts
    • 15,723 Thanks
    nearlyrich
    • #2
    • 9th Jan 10, 1:03 PM
    • #2
    • 9th Jan 10, 1:03 PM
    I am not an expert so don't know if this is absolutly correct BUT I think as you are currently over 50 (changes to 55 soon) you can take out 25% as a tax free lump sum. You can't just withdraw a pension fund and invest it elsewhere but you can transfer it to another provider. There are sometimes pesion schemes written that if you leave before a certain time you can take back your contributions but it's usually a short time after commecing the job and not years after you have left. Your providor should be able to give you a straight answer, keep at them till they do.
    NEW to the Forum? I'm the Board Guide on
    Debt-Free Wannabe

    I can move and change posts but I don't have time to read everything. If you spot a reportable post please use the button below.

    Any views are mine and not the official line of MoneySavingExpert.com.
    Free impartial debt advice from: National Debtline or Stepchange
  • zzzLazyDaisy
    • #3
    • 9th Jan 10, 1:07 PM
    • #3
    • 9th Jan 10, 1:07 PM
    You are thinking of the trivial pensions rules. Unfortunately they only apply if your total pension pot after adding all the pensions together, is worth less than 17500

    More info here....

    http://www.litrg.org.uk/news/index.cfm?id=339
    Last edited by zzzLazyDaisy; 09-01-2010 at 1:09 PM.
    I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.

    Letter Before Claim from a parking company? DO NOT IGNORE - THE NEXT STEP IS COURT ACTION. See my thread (page 1 of the parking forum) and FIGHT BACK!
  • dunstonh
    • #4
    • 9th Jan 10, 1:07 PM
    • #4
    • 9th Jan 10, 1:07 PM
    I allowed to take ALL of the funds out?
    Not unless you are aged 60 or over and all your pensions have a value (or indicated value) or less than 1% of the lifetime allowance (which equates to 17500 at the moment).
    but I would like to re-invest it elsewhere for the next ten years.
    what would be the point of that?
    I don,t wish to put it in another pension either, it will go offshore.
    its more tax efficient onshore.
    I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • Aegis
    • #5
    • 9th Jan 10, 1:08 PM
    • #5
    • 9th Jan 10, 1:08 PM
    Hi Newbie here

    I have two small works pensions which were 'frozen' some time ago after moving on in jobs etc.

    Both after finally tracking them down thru the pensions service are worth approx 12k each so even with a lump sum payout will pay approx 500 per year.

    Am I allowed to take ALL of the funds out? I have been trying to find out IF there is a limit on low pensions and cannot find it, but I would like to re-invest it elsewhere for the next ten years. I don,t wish to put it in another pension either, it will go offshore.

    I have asked both companies involved and I never get a straight answer, so would like to know if its possible before I continue on.Btw I am 57 and Live in sunnier climes now too

    Thanks in advance
    Originally posted by Lynsab
    If memory serves, trivial commutation (i.e. taking all the pension at once) is only allowed if your total pension pot is worth up to 1% of the lifetime allowance. As such, with 24k in pensions, you are ineligible for this.
    I am an Independent Financial Adviser
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • Lynsab
    • #6
    • 9th Jan 10, 2:12 PM
    • #6
    • 9th Jan 10, 2:12 PM
    Thanks for your replies, thats what I suspected its to low also to transfer to a QROPS apparently. So would you suggest leaving well alone and not even take the lump sum so as not to diminsh the pension further, if nothing else its 1k a year for life I suppose. Not to be sniffed at
  • Aegis
    • #7
    • 9th Jan 10, 2:31 PM
    • #7
    • 9th Jan 10, 2:31 PM
    Thanks for your replies, thats what I suspected its to low also to transfer to a QROPS apparently. So would you suggest leaving well alone and not even take the lump sum so as not to diminsh the pension further, if nothing else its 1k a year for life I suppose. Not to be sniffed at
    Originally posted by Lynsab
    Unless there are very high guaranteed rates people would usually be better off taking the maximum tax free lump sum and investing it for income elsewhere (25% tax free cash gives you more flexibility but still allows you to invest it for income without the complication of a pension wrapper if you choose). Under your circumstances, however, you will need to find out if the tax free lump sum would actually be tax free, as some countries don't recognise this and instead treat it as part return of capital and part capital gains, subject to their usual taxes. You'll need to find out precisely how your pensions will be taxed before you make any decision as to how to proceed with commencement.
    I am an Independent Financial Adviser
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
Welcome to our new Forum!

Our aim's to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

316Posts Today

1,915Users online

Martin's Twitter