Trivial commutation - advice needed please

orlando1697

I'd be really grateful for any info or advice on the following pension problem. (I am a woman aged 55, will be 56 this year).

In 1988 I opened a Retirement Investment Account with Abbey National. My then employer had no pension scheme and I was worried about the major cutbacks to SERPS. I was then (and still am) on a relatively modest wage so wanted to avoid PPPs with fees. I managed to pay £75 pcm into this account until 1994, when I got a better paid job with a different employer and I then joined their NON-CONTRIBUTORY pension scheme. I stopped payments to my R I Account as I was now opted out of SERPS. I had about £6,750 in my R I Account, and compound interest over the years has now brought this figure up to around £8,000. (All the money in this account is mine - no contributions from employer)

These are my questions:

1. Will this small pension pot of £8,000 be eligible for trivial commutation? It is the only pension I have ever contributed to as the company pension I joined was non-contributory - because I made no payments towards it, I received no tax relief.

2. If trivial commutation is not possible, what are the alternatives? (Clearly, an annuity is out of the question).

3. Will I be able to receive my company pension (covering 8 years' service until I was made redundant in 1992) free of basic rate of tax since I received no tax relief at the time.

I continue to work full time (and opted in the 1970s to continue paying a full NI stamp) and have remained in SERPS since 2002.

Sorry this is so complicated, and thank you for any advice anyone can give.

dunstonh

wanted to avoid PPPs with fees.

everything has fees. Even cash in your savings account. However, some are explicit and some implicit.

1. Will this small pension pot of £8,000 be eligible for trivial commutation? It is the only pension I have ever contributed to as the company pension I joined was non-contributory - because I made no payments towards it, I received no tax relief.

No. You have to wait until age 60 at the moment to qualify for that and the option includes all your pensions not just one.

2. If trivial commutation is not possible, what are the alternatives? (Clearly, an annuity is out of the question).

Leave it where it is or transfer to another provider (which has to be left)

3. Will I be able to receive my company pension (covering 8 years' service until I was made redundant in 1992) free of basic rate of tax since I received no tax relief at the time.

No. You will be subject to tax but will have your personal allowance. The employer effectively got the tax relief.

EdInvestor

What total pension income are you now expecting at retirement? State pension + non contrib pension + tiddler?

Get a state pension forecast here: www.thepensionservice.gov.uk

If it under 10k p.a. it would be worth your while to move the tiddler to a modern pension and then add additional contributions so that eventual income rose to the 10k level ( which will be tax free as within the old age allowance). You could of course take 25% of the enlarged pension in tax free cash and taking the income in drawdown format would be a possibility via a low cost SIPP.

jem16

EdInvestor wrote: »

Get a state pension forecast here: https://www.thepensionservice.gov uk

The correct link is http://www.thepensionservice.gov.uk/