Can I cash in my pensions? (and other pension questions)

purple_hamster

And more importantly, is it worth it?

I have 2 pensions - one a local government one, the other a private one. I'm not entirely sure how much is in them, but less than £15,000 in total.

I'm 35 and a full-time mum, so I don't pay tax as I have no earnings. I can't imagine that I'll be a wage earner again for a long time.

Or would I be better off transferring both into one private pension?

I'm not sure if it's even worth me investing into a pension as it'd be from my husband's wage and would therefore be after tax is taken off. Would it be better to pay more money into his pension rather than me having my own one?

molerat

NO !!

When you reach 60 and the total of your pension funds, including a calculation for pensions in payment,is worth less than 1% of the lifetime amount, 1% is currently £18K, you may be able to take a taxed lump sum.

Any money paid in by your husband will receive a 20% top up by the taxman.

If your husband is on 40% tax then it will obviously be more efficient to pay into his pension.

As to transferring you need to take advice but the LGPS is probably better left where it is.

bendix

Huh molerat?

Are you sure you can't cash in pensions? Isn't it my money? I'm positive I was in the hairdressers this week, and the stylist said her daughter told her she'd heard that you could cash it in to pay for botox treatment and cruises.

She said Katie Price was talking about it on GMTV.

tanith

There is something called Triviality Rules where if all your pension pots(not including State Pension) add up to less than either £15000 or £17500 (not sure which) and you are over 60 you can take it as a lump sum.. someone with more info will be along I'm sure

molerat

bendix wrote: »

Huh molerat?

Are you sure you can't cash in pensions? Isn't it my money? I'm positive I was in the hairdressers this week, and the stylist said her daughter told her she'd heard that you could cash it in to pay for botox treatment and cruises.

She said Katie Price was talking about it on GMTV.

:rotfl::p Good morning.

CLAPTON

there's not enough information to answer ytour questions

but in general you can't take a pension until you are 55

but local government pensions are final salary gold plated pensions and worth keeping... you got 35 years before you get the state pension so who knows what jobs you may have in the period

you can contribute up to 2,800 net pa(grossed by to 3,500 by the taxpayer ) to a pension even if you have no earnings - whether is is good idea depends upon your general financial situation.
you might e.g. invest is a Stocks and Shares ISA instead

bendix

tanith wrote: »

There is something called Triviality Rules where if all your pension pots(not including State Pension) add up to less than either £15000 or £17500 (not sure which) and you are over 60 you can take it as a lump sum.. someone with more info will be along I'm sure

Which part of the phrase in the OP beginning "I'm 35 and a full-time mum" didnt you notice?

tanith

bendix wrote: »

Which part of the phrase in the OP beginning "I'm 35 and a full-time mum" didnt you notice?

Ok so I missed it my mistake...

bendix

You're forgiven this time. Don't let it happen again.

purple_hamster

OK thanks. I'll leave as they are, esp LGPS. I didn't realise it was final salary. I'll have to look into whether I can pay my other pension into that one too.

I'll look into stock and shares isas. We already have cash isas.

Loughton_Monkey

purple_hamster wrote: »

I'm not sure if it's even worth me investing into a pension as it'd be from my husband's wage and would therefore be after tax is taken off. Would it be better to pay more money into his pension rather than me having my own one?

Even though you are not earning, you are entitled to put £2,880 a year into a pension, in your name, and it will immediately attract tax relief of £720 a year, so £3,600 is invested.