Post-A Day - Pension withdrawal

mjdavis

My husband, who is 67, has two small pension funds each valued at £11k.

We were under the impression he could take up to £15k in pension in cash after the changes in April 2006.

Could someone confirm whether this would be £15k per pension or total investment?

Many thanks

oceanblue_3

mjdavis wrote:

My husband, who is 67, has two small pension funds each valued at £11k.

We were under the impression he could take up to £15k in pension in cash after the changes in April 2006.

Could someone confirm whether this would be £15k per pension or total investment?

Many thanks

Hello

Here's the answer...benefits may be paid wholly as a lump sum if the amount commuted, plus the value of all other benefits in registered schemes, including those in payment, does not exceed 1% of the Lifetime Allowance, or £15,000.00 from 6 April 2006.

With funds valued at £22,000.00, I'm afraid your husband would not be eligible for trivial commutation.

Cook_County

of course the rules are ludicrous in that if he could arrange for the fund to fall in value to £14,999.99 (by say investing and losing in a very high risk fund or paying a large MVA) he could then take the lot as a lump sum...

dunstonh

There is a way to abuse the system to allow that to happen without the client being worse off financially. At least where the fund value is not too far over the amount.

I don't think it would be classed as abuse but it wouldn't be looked on favourably. Then again, any advice which benefits the client and is done within the laws and rules shouldn't be an issue.