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Help and advice needed with pension lump sum

chiptech81
Posts: 10 Forumite
Hi
My father has a pension that started many years ago with WH Smith, this got frozen due to company change of ownership.
They have offered a lump sum now he is 60. The letter states:-
Lump sum entitlement - £8,116.16 of which 25% is tax free and the remainder will eb taxed as income making the net payment £6,462.62.
I phoned WHSMith pension to find out how many years this has been based on and they replied 3 years.
I would like to know:-
Is 3 years enough, is it possible to haggle and get more?
at what rate hat is the remainder taxed on?
Anyones views would be appreciated.
Thanks
My father has a pension that started many years ago with WH Smith, this got frozen due to company change of ownership.
They have offered a lump sum now he is 60. The letter states:-
Lump sum entitlement - £8,116.16 of which 25% is tax free and the remainder will eb taxed as income making the net payment £6,462.62.
I phoned WHSMith pension to find out how many years this has been based on and they replied 3 years.
I would like to know:-
Is 3 years enough, is it possible to haggle and get more?
at what rate hat is the remainder taxed on?
Anyones views would be appreciated.
Thanks
0
Comments
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Is this lump sum in addition to a regular annual income?0
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THis looks to be a trivial commutation pension. The 25% lump sum is tax free, the remainder is taxed as income, so would depend on what else he earned in the year it was paid - he would need to claim back any overpayment.
How long did he work at WH Smith, that's what the years will be based on? Also how long ago? In recent years frozen pensions have been uprated for inflation every year but if the job was ages ago, that might not apply.Trying to keep it simple...0 -
Thanks for the replies,
This lump sum is in addition to a regular income. He didn't work for WH Smith but for a firm that made the shop fittings, whether WH Smith owned it i don't know and my dad can't remember. He did say that the pension was not running for very long. As for how long it has been, it was probably started about 30 years ago and ran for either 2 to 3 years and then was stopped.
Would you say the amount offered is fair enough?0
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