Debt and Pension

johno31

Hi All...First Post here.
In a real sticky wicket just now.I have just started a DMP with Payplan,have an interest only mortgage,have no chance of releasing equity and work freelance.Am in need of cash pretty quickly to keep up payments and get me through the next 3 or 4 months. I am divorced,on my own and am 54 in Feb.
What I DO have is 2 personal pension plans with Scottish Equitable.One is from my old employers scheme whitch I transferred back in 1992.The amount then was around 14k (think it's at around 28k now,not sure) The other is one I started after being made redundant and is sitting at 23k.
Am I right in thinking that I could take out 25% from one of these? Whitch one would be best or doesn't it matter (I still pay into the latter).Can I just take the 25% and leave the rest in the scheme? Do I need the services of a Financial Advisor to do this?And finally, how long does this process usually take? Sorry for this being so long-winded.I KNOW that this is a serious step but don't have any other options.

Advice Most Welcome

dunstonh

Am I right in thinking that I could take out 25% from one of these?

Yes.

Whitch one would be best or doesn't it matter

You will almost certainly find that you wont be able to on legacy plans without commencing the income at the same time.

Can I just take the 25% and leave the rest in the scheme?

If it was transferred to another plan that allows it. (on assumption the legacy plan doesnt allow it).

Do I need the services of a Financial Advisor to do this?

Not if you know what you are doing.

And finally, how long does this process usually take?

3-5 weeks typically.

johno31

Many thanks dunstonh.I spoke to a guy at Scottish Equitable today.He says I just can't "take out" 25% of my first plan (not the legacy one), I have to buy an annuity and the 25% is taken from that. Is this correct? Or,can I transfer to another plan with Scottish Equtable that allows me to take the lump sum and leave the remaining 75% in the plan and continue making contributions? Hope this makes sense.

dunstonh

Is this correct?

Yes and no.

No its not technically correct from a generic standpoint. However, it is technically correct for the contract you are on. If you speak directly to the insurance company or their representatives they will only tell you what they can do. Not the options that are available on the whole of market.

Scot Eq should allow an internal transfer to a drawdown plan or you can use the whole of market to do that. Or you can get a local IFA to do it for you.

johno31

Many thanks again dunstonh

EdInvestor

johno31 wrote: »

Or,can I transfer to another plan with Scottish Equtable that allows me to take the lump sum and leave the remaining 75% in the plan

This is called income drawdown (aka "unsecured pension"). If you can't do it with ScotEq, you could always move the money to a low-cost SIPP such as the one run by https://www.h-l.co.uk and do drawdown there.

dunstonh

Note, when Ed says low cost, she means low cost in SIPP terms but more expensive than an insurance company SIPP.