cashing in pension

fender2000

i am 56 and i have a pension pot of £68,000 which i dont contribute to any more as now i work part time and become a carer to my wife and we can manage on what we get every week,my ifa has asked why dont i cash my pension in for a annuity which would give us a lump sum and a pension of £2,870 per year which would help as a extra income,seems a good idea but is it best left to hopefully build up a bit more,any advice thanks.

Just_landed

Be careful, if your income is over a certain amount each week you will lose carers allowance.

dzug1

If you are 56 annuity rates are going to be a whole lot worse now than waiting until you are older

dunstonh

General rule of thumb (which isnt 100% perfect but a good guide) is that if you dont need the pension income then you dont take it.

fender2000

are annuities for men going to be reduced in line to match womens annuities at the end of the year and if so is that also a good reason to cash in,if i waited 5more years would it make a big difference to the annuity i would get,my father died at 60 so i think it may be worth the gamble and take it now the thought of taking it later dying and then my wife getting half for 5 yrs and the rest going to the insurance company,its not a lot of money but at least i would have something out of it as it was pension from an old employer which i never contributed to and has just accumalated over the last 25 yrs

molerat

Alternatively if you don't need it leave it where it is and if you unfortunately clock out early your wife gets the lot.

dunstonh

are annuities for men going to be reduced in line to match womens annuities at the end of the year and if so is that also a good reason to cash in

You cannot cash in a pension so that option is not available. Annuity rates for men are likely to reduce a little but you are talking around 0.2% based on all current information available as it will be a move to unisex rates which are used on protected rights. However, interest rates have an impact on annuity rates as well and they look upward. Annuity rates also typically increase with every 3 months of age (not all providers are quarterly but some are)

so i think it may be worth the gamble and take it now the thought of taking it later dying and then my wife getting half for 5 yrs and the rest going to the insurance company,its not a lot of money

That isnt what happens on death on uncrystallised funds. Indeed, what you describe cannot actually happen as its not an available income option.
Death benefits on uncrystallised funds are better than on crystallised.

Loughton_Monkey

fender2000 wrote: »

are annuities for men going to be reduced in line to match womens annuities at the end of the year and if so is that also a good reason to cash in,if i waited 5more years would it make a big difference to the annuity i would get,my father died at 60 so i think it may be worth the gamble and take it now the thought of taking it later dying and then my wife getting half for 5 yrs and the rest going to the insurance company,its not a lot of money but at least i would have something out of it as it was pension from an old employer which i never contributed to and has just accumalated over the last 25 yrs

Yes. Annuity rates will probably go down a bit but you seem to be looking at a joint one anyway (50% for your wife). Because these involve a person of both sexes, it won't go down as much. If you chooses a true 100% joint life annuity then it shouldn't go down at all.

You don't seem to realise, from your comment, that only by taking it are you risking dying and leaving only half to your wife. Leave it where it is, and it will grow, and also provide 100% of value to your wife if you were to die before you take it.

If you want to take now, then do so. But if you don't need the money, then it will tend to dwindle away over time. Leaving it 'untaken' will give prospects for growth.

sleepless_saver

Just_landed wrote: »

Be careful, if your income is over a certain amount each week you will lose carers allowance.

OP doesn't need to worry about this because money from private or occupational pensions is ignored in assessing carers allowance (though state pension is taken into account).