Letter from IR re pension....help please!!

kevsam65

Hi all , ok I have today received the following letter from IR. I vaguely remember signing up for some pension thing years ago , to be honest , I was young (ish lol),and fairly stupid in financial matters , and have absolutely no documentation regarding this policy.The letter is as follows.....


Dear Mrs ...........

We are sending you this form because our records show that you have been a member of the following Appropriate Personal Pension/Appropriate Personal Pension Stakeholder Scheme since 6/4/89

The Phoenix (RL) Personal Pension Scheme
Phoenix Life LTD
Mailroom,Level 6
101 Old Hall ST
Liverpool

I have recently received a notification (from you and/or your scheme)cancelling the authority to pay minimum contributions to this scheme with effect from 5/4/07
I will stop payment of minimum contributions to this scheme in respect of earnings after 5/4/07
If any further minimum contribution bacome payable in respect of the period 6/4/89 to 5/4/07
we will pay these to the above scheme unless you are transferring your protected rights to a new appropriate personal pension, in which case we can pay the minimum contributions to the new scheme.

End of letter.
Now I'm totally confused , and dont understand any of that.... they do list a personal pension scheme number. Please could someone explain to me what this is about!! Thank you in advance

sam.x

jonathon_hart

Hi.

You joined a Personal Pension plan back in 89 to Contract out of the State Second Pension (was called SERPS). However in 2007 something happened to cause that plan to stop - either you said that you wanted to contract back in (you would have filled in a form to do this) or you joined another pension plan (either personal or more likely through work) that was Contracted Out.

What this means is that the Personal pension with Phoenix will become paid up, there will be no further contributions to it, but the money already in it will remain invested (and be subject to the performance of the funds it is invested in). This pension can either be left there until you retire or can be transferred to another pension scheme if you one that can accept the transfer.

Hope this helps

kevsam65

Hi Jonathon....... thank you so much for replying , been sitting here chewing my nails worrying , lol.:o

Well , I definately didnt change pensions (or open a new scheme) , and I'm pretty sure my employers havent offered an alternative pension . I was signed off longterm "sick" at the end of 07 , so whether that could be it I dont know!
I have managed to find Phoenix on the 'net (have to say the name rings no bells for me whatsoever) and am now looking for a number to ring ,and hoping they can give me more info,lol.
So can you tell me , what my options are , obviously I'm still off work at present , so I dont really understand what happens now?
Thanks for your time...

sam.x

jamesd

If you're more than 55 years old, likely if more than 50 years old and probably if more than 45 years old, you are likely to be best off contracted in anyway, unless say you want to take a pension earlier than when you get the state pension. The plan is to completely remove the ability for anyone to contract out in a couple of years anyway.

If you're not working and paying National Insurance contributions in some way then you don't currently have any money for HMRC to pay to a pension provider anyway. If you expect that to continue then all is fine.

Your first course is the one you're taking, to contact Phoenix and get details of this pension, so you know how much money is in it.

If you're 50 years old you'd probably have the option to take a lump sum and pension from it but you'd have to carefully consider things like the effect on any benefits for long term sickness that you're receiving, from work or the government, before doing that.

0845 788 3311 or its direct-dial equivalent 0151 255 5177 is a reasonably likely number for you to call, the link has other ways to contact them. Not guaranteed correct, there are too many choices to be sure, but they should at least give you more of an idea.

kevsam65

Hi James......

Background info on me , lol , 39 years old , have been signed off work since dec 07 , was getting SSP until that ended in July of this year , very recently awarded DLA , and just waiting to hear about incapacity benefit , whilst my employers try and find me an alternative job , as I cant now do the job I was employed for.

I got hold of Phoenix (stupidly , before seeing your post) , apparently I took the pension out with Royal Sun Alliance (does sound familiar ) , I think the woman on the phone knew I was worried and got me off quick , basically she said i should write in with new address so they can update records , and other than that not to worry. It didn't even occur to me to ask what the pension is worth (feeling quite small and embarrassed right about now lol). Should I phone back and ask any pertinent questions?
Thank you for your help , I do appreciate it.

sam.x

jamesd

With DLA it doesn't seem likely that it'd be worth taking the pension even if you could, and you can't because you're not old enough. It'll be age 55 before you're able to touch it, at which point you'd be able to take up to 25% as a tax free lump sum and use the rest to get an income in some way (either staying invested and taking some income or buying one or more annuities).

No law against phoning back. They can probably handle two calls between 1989 and now without thinking you're calling too much.

Once you've supplied the new address they will probably send you an up to date valuation and some details of your plan. That would also be a good time to ask more questions here and by phone.

You're far from alone in having forgotten about or untraceable pension. There's even a Pension Tracing Service to help people find old pensions.

She's right that there's nothing to worry about now. You don't have money to put in and can't take money out. You could change investments or move the money to another plan, though. Worth pondering when you know a bit more about this one and the investment options that it offers. Decent investments are the key to how much you get from a personal pension so there's probably some room to improve that after this long.

Mostly you should be happy that the tax office wrote to you and told you that you had money you didn't know about instead of money to pay them.

kevsam65

Aw Thank you so much James , I feel much more reassured now , and more than a little embarrassed at my lack of knowledge and ignorance on this !!:o I'll write to them tomorrow , and if its ok , post back here when I have more info about the plan. Thanks again , you're a star!!:T


sam.x