Abbey Life Private Pension Few Queries

masonj3

Hi,. my dad is 65 in May and has a small private pension with Abbey life, he has to make a decision with regards as to what to do and we have a few general queries which may help him to make a decision once we establish the facts, am just seeking opinions rather than requesting specific info prior to seeing an IFA

His pension is worth 28k, he can take a lump sum or 7k and an option to transfer the rest via open market option, does he have to purchase a new annuity at the same time as taking the lump sum if he chose this route?

he has a larger private pension too £140k if he transferred the smaller pension in full to that pension would he be able to have the 25% tax free lump sum of the combined new total ?

My mom is 8 yrs younger than my dad and in good health where as my dad has lots of health problems and may look at impaired / enhanced annuities - ar there any specialised annuity providers out there worth contacting and can you have a joint life annuity pension as opposed to just choosing a guaranteed period

if he deffers this small pension and selects a new retirement age say in 2/3 yrs time would he be able to take his lump free sum then or does he loose the right to do this after reaching age 65?

Finally - is a £21k pension too small to bother with for considering an enhanced / impaired health annuity


Apologies for so many queries just need to get our head around some of the terminology, appreciate any advice anyone can offer

Thank you x

bilbo51

Several people will be along to answer your specific questions, but have a look at the publications you can download free of charge from the moneymadeclear website. http://www.moneymadeclear.org.uk/publications#pensions_and_retirement

dunstonh

does he have to purchase a new annuity at the same time as taking the lump sum if he chose this route?

No. However, with such a small residual fund value, the alternatives may not be cost effective to continue with an unsecured pension income.

he has a larger private pension too £140k if he transferred the smaller pension in full to that pension would he be able to have the 25% tax free lump sum of the combined new total ?

Assuming no guaranteed annuity rates, consolidation of the pots at retirement is what most people would do. No point keeping them apart.

My mom is 8 yrs younger than my dad and in good health where as my dad has lots of health problems and may look at impaired / enhanced annuities - ar there any specialised annuity providers out there worth contacting and can you have a joint life annuity pension as opposed to just choosing a guaranteed period

Most of the enhanced/impaired providers will only deal through IFAs. No point going direct as you restrict choice and you don't save anything. Indeed, like for like the IFA could beat going direct.

if he deffers this small pension and selects a new retirement age say in 2/3 yrs time would he be able to take his lump free sum then or does he loose the right to do this after reaching age 65?

He has until 75 to take the lump sum.

Finally - is a £21k pension too small to bother with for considering an enhanced / impaired health annuity

No. However, looking at this pension in isolation is not a good idea when there is a bigger pot.

Remember death benefits before commencement are better than post commencement. Plus, if there are protected rights in the pension, it may be better to defer those until next year when they are abolished (and the restricted terms they have are abolished with them).