Help needed with pension sharing order

littlemissnau41

Hello

Would appreciate any advice regarding a pension sharing order. I am to receive a portion of my ex-husbands pension, which comes to about 15K. I am now being asked by my solicitor whether I wish to transfer my share of the plan into an exsisting pension scheme or take up a new plan with Prudential (whether the scheme is held)

My question is, would I be able to take all the funds as a lump sum instead and not actually transfer into another pension? My plan is to use this money as a deposit for my own property.

Many thanks.

margaretclare

No, I don't think you can do this, at least not until you're at least 50.

The solicitor is asking if you have an existing pension plan which could be boosted by the addition of this £15K, otherwise the Prudential option. It seems a reasonable question for your solicitor to ask you - after all, if you had a good pension scheme of your own to start with, adding £15K to it would probably make sense.

You can't take this pension-share and treat it as a cash bonus, to use as a property deposit! It's meant to be for your future when you can no longer work, which is what all pensions are about.

littlemissnau41

Thank you for your advice. I'm 54 so thought I could possibly have this option of being able to take the money in one lump sum?

With regards to finding a new pension.... does anyone know how much an IFA will cost me? I can't really afford to pay but would like to make sure I do the best I can with the money.

Many thanks.

MrChips

Definitely can't be taken as a lump sum. If you were aged 60 with no other pension provision, you might be able to take it as a "trivial commutation lump sum", of which 25% would be tax free, and the rest subject to income tax at your marginal rate.

Re IFAs, there are plenty of people on this board who can guide you to the most efficient way to get independent financial advice - I'm sure they'll be along shortly. If you can't afford to pay for it up front, I believe many will work on a commission basis.

EdInvestor

littlemissnau41 wrote: »

Thank you for your advice. I'm 54 so thought I could possibly have this option of being able to take the money in one lump sum?

No, you would need to be aged 60 to take the lump sum under trivial commutation.

As you're over 50 you could take 25% in cash if you transfer the money to a SIPP and put the fund into income drawdown.The other 75% could then sit there, hopefully growing, until you needed to take an income later. Or you can take an income now, though the fund is so small it's hardly worth it.

Have a look at these low cost providers:
https://www.h-l.co.uk
https://www.sippdeal.co.uk.

No IFA should be needed to open an account at these and transfer the money in.

Note that if you go this route you would not be able to take the remaining money as a lump sum when you are 60.But very probably you would not be able to take it anyway at that time, because it will have grown to be over the limit for trivial commutation (16,500 IIRC).

dunstonh

No IFA should be needed to open an account at these and transfer the money in.

Although you should be wary that the process that Ed has recommended is considered higher risk and chances are an IFA would put you off doing that because it is unlikely to be best advice.

So, it is an option available to you but you may feel that doing a high risk transaction and utilising an experienced investor contract is not the right thing to do. Those companies wont tell you if its right or wrong. They just take your instructions.