guaranted pension can i sell it

savinglikemad

hi, I have a pension that in ten years (when I reach 60) when it matures guarantees me approx £100 a month. I would like to cash in my pension now, but have been told that because it is a guarantted amount I cannot take a drawdown. The current value of the pension is £14,000 I understand it is a good payout per month, but have another source of income (not pension) that will be providing me with a monthly income so I will just end up paying tax on the pension, Any ideas helpful

McKneff

You cannot cash in a pension. Its a pension for your retirement, not a savings account. When you are 55 you can take 25% in a lump sum then buy an annuity with the rest.

Dont you think everybody would be doing this if it was allowed.

dunstonh

I would like to cash in my pension now

You cant cash in a pension. Its not your money to do it.

have been told that because it is a guarantted amount I cannot take a drawdown.

That may well be the case in the pension its in at the moment. Transferring it to one that can would get round that. However, you will only get 25% of the transfer value of the lump sum and with the value of £14000 only gives you £3500 (assuming the value is transfer value and not current value).

EdInvestor

To put the pension into drawdown you'll have to move it to a SIPP, after which you can take 25% tax free cash and draw down an income if you want (or not). You will lose the guarantee by doing this.

https://www.h-l.co.uk and https://www.sippdeal.co.uk offer a suitable low cost SIPP.

savinglikemad

thank you for your replies, Sorry I meant draw down not sell it. Is it counted as taxable income for the year it is drawn down. Is it 55 that I can draw down (provided obviously that i have transferred it in to an account that can be drawn out of.) I thought the age you could draw down is 50.

EdInvestor

savinglikemad wrote: »

thank you for your replies, Sorry I meant draw down not sell it. Is it counted as taxable income for the year it is drawn down.

The tax free cash is not counted as income, only the actual income you take (if any).

Is it 55 that I can draw down (provided obviously that i have transferred it in to an account that can be drawn out of.) I thought the age you could draw down is 50.

At the moment it is 50, from April next year it is 55.

savinglikemad

do you know if my retirement age or age I can take it will change because currently I have in the paperwork retirement age, ehich when I took out the policy was 60 but due to goverment changes means my state pensionable age becomes 65 years and six months

Cook_County

savinglikemad wrote: »

thank you for your replies, Sorry I meant draw down not sell it. Is it counted as taxable income for the year it is drawn down. Is it 55 that I can draw down (provided obviously that i have transferred it in to an account that can be drawn out of.) I thought the age you could draw down is 50.

Is there anyone actually offering unsecured income on such small amounts (I'd have thought any possible benefit would be outweighed by the administration costs)?

EdInvestor

Cook_County wrote: »

Is there anyone actually offering unsecured income on such small amounts (I'd have thought any possible benefit would be outweighed by the administration costs)?

Sure, the SIPPs I mention and various others will do drawdown for quite small amounts, they charge for individual payments (and other services) so with little funds you would normally draw your income in an annual lump sum.