Had ToRetire Young With a Small Pension

jailhouse_2

Due to ill health I have just been medically retired (fairly young - 41) from work with a pension of £190 per month. I am receiving DLA of £290 per month.

My question is, all the years i was at work, i followed the Government's advice and paid into a PEP (now frozen) and Maxi ISA to boost my income when I retired (60 was my plan). Do i need to declare this as "savings" or is it OK to keep it as my original plan of a Pension Top Up. I am in a 25 year plan with Virgin (i think) with 15 years still to run.

Can anyone please give me any advice. I have tried looking to the DWP site but their information is so confusing.

Many thanks to everyone who replies

exil

No-one else has replied - so here goes. I'm not an expert but I think unless it really is a pension scheme (ie one that prevents you drawing out any money until retirement) it's counted as savings. But - see your nearest Citizens Advice Bureau!

Deemy

PEPS , TESSA's and ISAs are counted as savings and the current VALUE has to be declared as capital. As well as the interest / dividends being counted as INCOME.

I don't understand frozen ? What do you mean frozen... ??? Okay I guess you mean that you ceased new contributions to the PEP when they they finished some years back.. but it is still an investment the value of which fluctuates. As per the annual or bi-annual statements that they send you.

But you do need to declare the current value as savings as yuo can cash them in anytime.

jailhouse_2

exil, deemy,

thanks for the replies. Yes you are right about the PEP, it has remained untouched since they were finished some years ago.

I will take your advice and go to the CAB with my paperwork. The last thing i need is to end up in financial debt.

Thanks again, your advice is really appreciated.
JH

fez_2

Jailhouse, I suggest that you consider the validity of the advice you were given when taking out the PEPs and ISAs if indeed you were given financial advice.

As you have stated that you have a 25 year plan with 15 years left to run, this suggests to me that you were led to believe it/they were retirement plans. Indeed many people use this type of saving vehicle to supplement their retirement planning due to the flexibility. However, if your priority and sole aim was to "boost your income when you retire" you may have been missold tax free savings in place of private pension arrangements. It may be that at the time you took out the original PEP, you were ineligible for private pensions due to membership of an occupational pension scheme through your employer although the amount of pension income you are receiving would suggest otherwise (subject to clarification of the scheme rules etc.) but even then you should have been entiltled to make additional voluntary contributions (AVC's) or free-standing AVC's

Get it checked out!