Frozen pension

binny1234

what can i do with a frozen personal pension,i'm 44years old and have a few k in it

seven-day-weekend

You can either leave it where it is and draw it at 55, or transfer it to another one.

The experts will be along later with more advice.

dunstonh

not a lot you can say really. Its a pension and its for retirement. You can leave it where it is or move it to another pension. What is best will depend on the type of pension.

Remember the term frozen doesnt really explain the position of the pension well as indexation may be taking place on your pensionable salary with only the years of service frozen.

MikeJones_2

dunstonh wrote: »

...as indexation may be taking place on your pensionable salary with only the years of service frozen.

Hi dunstonh,

Never heard of this happening on a personal pension though. Can you expand?

Mike Jones

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

dunstonh

not on a personal pension but I assumed it wasnt as the OP used the term frozen. Either it isnt a personal pension or it isn't frozen as you cant have a frozen personal pension.

binny1234

should have said stopped paying into

EdInvestor

binny1234 wrote: »

what can i do with a frozen personal pension,i'm 44years old and have a few k in it

Review the funds offered and the charges.If there is a good selection of external funds and the AMC is 1% or less, consider reinvesting the money and making new contributions. If charges are high and fund choice is small and poor, consider transferring the pension to a new provider.

At the age of 55 you can take 25% in tax free cash and an annuity income with the rest, or leave the rest invested for later in an "income drawdown" plan.

binny1234

sorry to be a pain but whats a income drawdown plan

EdInvestor

With income drawdown, you leave the capital invested and take an income (between zero and 120% of the annuity rate) from the plan.

With an annuity you use the capital to buy an income which is guaranteed for life - but which will usually be affected eventually by inflation.

A drawdown plan has no guarantees, but if invested well has a better chance of paying a growing income long term. Also the capital can be paid out (-35% tax) to beneficiaries as a lump sum.