Trivial pensions

Pobby

My OH and I have about 5 paid up small pension funds as well as ongoing personal pensions.The small pots are all below £15k each and as we are both in our 50`s would it be a good idea to cash them in and reinvest somewhere else?

EdInvestor

You can only cash them in if all your pensions (excpet state ones) are not worth more than 15k in total, and you have to be over 60 to do it.

What you can do if you're over 50 if take out the 25% tax free cash, while leaving the rest of the money invested until you need the pension income later. To do that you will need to transfer the pensions into a SIPP and then put them into "phased income drawdown" - which is not as scary or complicated as it sounds, once you get the hang of it

dunstonh

If you dont need the lump sum out, then you can investigate switching the pension to another provider if you are not satisfied with the one you have.

Pobby

Thankyou very much for replies.

margaretclare

Pobby, you should be able to transfer all your 5 small paid-up pension funds into one decent fund where the total will grow better for when you really need money for retirement. A stakeholder might be a good place where you can put all the 5 funds. Or a SIPP.

The pensions legislation is such that you can't get at your money - assuming that it's called a 'paid-up pension fund' and not something else e.g. an endowment - until you're a defined minimum age. But it CAN be transferred to another pension provider and that would mean there'd be a bigger fund which would grow.

Oh-oh. Have just realised - you said you had 5 small pots between you. But if each of you has more than one, same applies. You can't have a joint pension pot for all 5 - sorry, misunderstood and misread.

Best wishes

Margaret Clare

EdInvestor

Whether oir not it's wise to transfer the pensions also depends on what kind they are.Frozen company final salary pensions in general shouldn't be transferred though there can be exceptions. Company money purchase pensions are usually no problem but check the charges and how the pension is performing. Paid up pensions in With profits funds need checking for valuable guarantees before the money is moved.Paid up pensions in unit linked funds are usually no problem, but also check charges and performances.

Apart from that, it's quite simple

dunstonh

GARs can also apply to unit linked funds as well.

Pobby

Thanks again