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Deferred Pension

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Hi There,

Just wondering if someone can give me some advice. I have a deferred pension from J.Sainsburys which I had for about 5years. There's not a great deal in it as I was only part time.
I am now wondering if this can be transferred into a high interest savings account?? If not, is there any reason why it can't be??

Thanks
LG32

Comments

  • Andy_L
    Andy_L Posts: 13,025 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    No, money in a pension is effectively trapped there untill age 50(soon to be 55). You may be able to transfer your Sainsburys pension to another employers pension or a private arangement (stakeholder, private pension or SIPP). Although whether that's a good idea depends on a number of factors
  • Hi LG32 and welcome to the site :),

    Pensions cannot usually be transferred to cash. One reason is that your contributions originally attracted tax relief, so if it was possible then it would be a great wheeze to get money off the government. Another is that the Treasury is scared that if you could convert your pension fund into cash, then you would spend it all at once and become a burden on the state. People simply can't be trusted, you see.

    But if your total pensions are under £15K in value, then there is an exception.

    See this "Trivial Pensions" thread
  • Hi ReportInvestor,

    When you say total pension amount do you mean all the pension funds that I have?? I have got a feeling that my pension funds are under £15k and the J.S one only totalled about £5k if that. That would be the only one I would want to cash in.

    I would like to put that money towards property investment, so it wouldn't be wasted.

    Do you think there is a way of getting the J.S pension cashed in??

    Thanks for the info by the way, it's really helpful for money dumb people like myself!!!
  • Here's an explanation of how it works

    The problem is that if you have another pension that is going to pay income, then for every £1pa income that counts as £25 of pension fund.

    So if you are heading for £600pa pension income from any source apart from a state pension then that is going to put you over the £15K limit :( regardless of any small past deferred pension.

    Also this link says pensions can only be commuted between ages 60-75. Could someone else confirm those ages?
  • Another point to make is that you can only trivially commute your pension if you are between the ages of 60 and 75.

    See here for the HMRC technical page on this

    http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm09104910.htm

    Thanks

    Jonathon
    I have worked for 5 years as a Pension Administrator and then a further year in a non-administrator pension role. I am not (and never have been) an adviser. Do not take anything I say as advice, it is information given on the best of my knowledge.
  • More from the Telegraph

    More from the Mail

    So A-Day increased the limit on commutation of trivial pensions from £2.5K to £15K :), but also requi red occupational pensions to be taken into account for the first time in the calculation :(.

    So the changes will have helped some, but shut the door on others.
  • Thanks for all the helpful info, I am only in my 30's so looks like I'm onto a loser on this one.

    What a pain!!!!

    Thanks again

    LG32
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