Help - should I stop paying into pension?

EvelynWood

Hello I’m new here, and hope that someone will be able to give me a little help about whether to continue paying into the pension I’ve got.

I’m absolutely clueless about pensions and would like to know (in very simple terms), what action I should take.

I don’t know what information you need to be able to help me, so I’ve included everything I can find from the paperwork I’ve got

In 1989 I started a Personal Pension with Abbey Life (I have no other pensions or investments)
The Nominal Retirement Date is 2024 – when I will be 60
Protect Rights Contributions are being paid
Waiver of contributions benefit is included on Retirement Benefits
I am Contracted Out of S2P
The investment is Abbey Pensions International Series 3
The Protected Rights Units are 2072.085 and the Value is £11,976.65
The Non-Protected Rights Units are 1738.899 and the Value is £10,050.84
The fund will be used to buy a pension on retirement

I had to stop work in November 2004 due to health problems, but had managed to keep up my payments since then (£68.60 per month through last year). But have recently received notice that the payments will go up to £75.46 per month.

My only form of income is Incapacity Benefit of £80 per week, and I now don’t have any savings left to keep up the pension payments. It is unlikely that I will be able to work for the foreseeable future, so now need to make the best decision about my pension.

Can/should I stop making any further payments into the pension? How would this affect the outcome?
Can/should I reduce payments rather than stop them completely?
Should the pension be moved to something else?
Anything else I should know or consider before making a decision?

Thank you very much for any help you can give me…. Please be gentle, I scare easily :eek:

dunstonh

Can/should I stop making any further payments into the pension?

Probably given that you are on incapacity benefit. (suggesting affordability will be an issue sooner or later).

How would this affect the outcome?

You will get less in retirement.

Should the pension be moved to something else?

Abbey Life have been closed for new business for a long time and in my experience it is possible to get modern plans cheaper.

Anything else I should know or consider before making a decision?

We cant tell you what to do or give you advice on the boards. We dont have the info on you to do it even if we could. Discussion is fine but at the end of the day you get no consumer protection by acting on comments made on this board.

cheesedoffwithdebt

I am also an IFA-

The other adviser was right- this is not the venue for giving you advice- however for information purposes the following might be helpful to you;

1. when you took the contract out you probably had an automatic increase each year built in-so their demand for a higher premium is only an automatically generated letter. These are your savings and under your control- its not money you owe where someone could hold you to the payment.
2. however- you do need advice as to whether making your plan paid up- that is- you suspend payments either until you retire, or have money to invest again-will incur a penalty. It's unlikely but you ought to check.
   
   You do need to find a good adviser though- my best advice on that front is to try and get a recommendation from someone. Do remember there are alot of companies out there whose mission is to sell you something new, so you need to find someone who has the integrity to help you with what you have. I wish you all the best!

jamesd

EvelynWood wrote: »

Waiver of contributions benefit is included on Retirement Benefits

That pays your pension payments if you're unable to work for certain reasons, generally including sickness. Does the waiver in this policy cover whatever has caused you to be on incapacity benefit? It's possible that the pension company will take care of the contributions for you. Find out. Get advice independently of the pension company as well, to double-check what they say about whether the cover applies to whatever has got you on incapacity benefit.