Pension plan due to mature before I retire ..

softfoot

I am rapidly approaching 60 and have just been informed that one of my plans is due to start paying out on my 60th birthday, it is a personal plan with Standard Life. However, I intend to continue working for as long as possible and since I am a higher rate tax payer I would lose 40% of any income from that plan - not desirable.
What are my options here? I guess I could pay the income into a stakeholder plan that I have (and thus get the 40% back) or I could transfer the fund into the stakeholder plan?
I plan to see an IFA but want to go armed with a few plausible options.
Do I have any other choices??
TIA
Dave

dunstonh

I guess I could pay the income into a stakeholder plan that I have (and thus get the 40% back) or I could transfer the fund into the stakeholder plan?

Not a good option.

What are my options here?

deferring it to a later age is the easiest one.

The selected retirement age is, for most plans, just an indication of when you want to take benefits. It is not required for most plans. So, let SL know that you dont want it this year and they can defer it to later. That said, there are a minority of plans were deferment may not be the best option.

MikeJones_2

Hi softfoot,

Lots to consider here, but I'll start with:

If you consider deferring taking your Standard Life pension beyond age 60, if that is what the original term was written to, check to see (i) if any monies are invested in with-profits and (ii) if 'yes' to the previous point, is there an attaching Guaranteed Annuity Rate (GAR)?

Some with-profit pension contracts were written with a GAR which would be a valuable asset given today's lower annuity rates (assuming you took the policy out some years hence). And some of those contracts stipulated that the GAR would be lost if the pension didn't commence on the original 'Normal Retirement Date'.

Hope that helps as a start.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a 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.

softfoot

Interesting - thanks
Any other suggestions are welcome

EdInvestor

If the SL plan is in With profits you also need to check if an MVA (exit penalty) will apply if you defer.Many SL plans have MVAs of 25% or more. The ideal scenario might be (if there is no GAR or MVA) to move the plan to a SIPP and put it into income drawdown, taking out the tax free cash, but leaving the rest of the fund invested, taking no income.

You may well hoiwever find that if you try this - or any other plan not involving an immediate annuity- SL will impose the MVA.

jack_spratt_2

I just wonder if the pension was a section 226(RAC) and there is confusion in that the poster assumes he has to take his pension at 60 .
As other posters have said it is important to check if there are any GAR attached

softfoot

The age of 60 was (as I remember it) a choice that I made when I started at the company 15+ years ago.

jack_spratt_2

Section 226 finished about 20 years ago( so that contract was not available 15 years ago) so it is not relevant