pearl with profits personal pension

kelise

Hi.

My husband has just received a statement from pearl regaing a With profits personal pension plan.

He did not know he had this and cannot remember taking it out. It has all his details etc so if obviously for him. He thinks maybe it was something to do with his first employer as it is 20 years old.

My question is: Is he allowed to cash this in. The website has given him a form to fill in and send back asking if he wants the money in chq form or paid into the bank. However I am a little concerned that he is getting excited about receiving £7k when i dont thionk they will pay it out as it is a pension.

I am not sure what a with profits personal pension is so could someone please let me know if this can be cashed in.

Thanks kelly

dunstonh

Is he allowed to cash this in.

only if he is aged 60 or over and ALL his retirement pensions are valued at less than 1% of the lifetime allowance can he get access to it as a lump. Even then its taxable.

If he is under 60 then he cant take it as a lump. He can commence the benefits if he is aged over 50 but thats all. (meaning 25% as a lump sum and the rest as income.

MiloH

kelise wrote: »

Hi.

My husband has just received a statement from pearl regaing a With profits personal pension plan.

He did not know he had this and cannot remember taking it out. It has all his details etc so if obviously for him. He thinks maybe it was something to do with his first employer as it is 20 years old.

My question is: Is he allowed to cash this in. The website has given him a form to fill in and send back asking if he wants the money in chq form or paid into the bank. However I am a little concerned that he is getting excited about receiving £7k when i dont thionk they will pay it out as it is a pension.

I am not sure what a with profits personal pension is so could someone please let me know if this can be cashed in.

Thanks kelly

If he's over 60 and has total pensions valued at under £17,500 then he can have it back as a lump sum, 25% of it tax free and the rest is added to taxable income.

With profits refers to the fund where his money has been invested. The fund invests in a range of company shares, property, gilts and cash. The key thing to keep in mind is that With Profits plans have guarantees. Pearl tended to give very generous guarantees and there is a chance that the value of the guarantees is greater than the return you would get for cashing-in. I'd ask Pearl to confirm the guaranteed basic sum and bonuses to date because those two together make up the guaranteed fund value available at the selected retirement date. Compare this to the amount they will give if you cash-in or surrender to see if the guarantee has any real value. Also ask if there is a guaranteed annuity rate and if so, compare the guaranteed income he would get with the income you might get from taking the lump sum.

That said, even if the guarantees are good, if this is the only pension fund you have to also consider the impact of pension income (and/or the lump sum) on any entitlement to pension credit.