HBOS pension wind-up help!

thesun_2

hi i wonder if anyone can help me.

i recieved a letter this morning to tell me i could take a winding up sum from my pension.

i no longer work for the company and havent since december 2010 (after finishing maternity leave).

my first question is..

as i am not a tax payer in this financial year and the lump sum is £6424.92 - will i pay tax?

my second question is..

there is a piece of text in the letter which makes me think that i may not actually get the payment!

"by law a payment can only be made to you if the total value of your account is less than £18,000, and your current employer (if you have one) has not paid contributions on your behalf in to the scheme in the last 5 years"

now...i have only finished working there in the last year and they always matched my contribution (there or thereabouts), so does that mean i wont be elligible for the lump sum? or does the fact that i no longer have an employer make this point invalid to me?

i will be able to find out when i call up on monday (lines are closed weekend), but i would love to know today!

thank you very much in advance!

molerat

You will pay tax on the lump you receive sum due to the way the tax legislation works using a 747LM1 code on that payment but you can claim back anything that is not due http://www.hmrc.gov.uk/incometax/overpaid-thro-pension.htm#5

You do not have a current employer but that bit is badly worded (or even wrong) so have a read here http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm09105100.htm

christibel

Hi, I got this letter aswell and I have also left Hbos over two years ago. The lump says i'm due back £3000.... but I have heard through my colleagues who still work there that this isn't the case anymore and the lump sum isn't an option...!!! I am so annoyed if this is the case as I've spent my day working out how i am going to spend the money!!

Can anyone advise if we are to get it if we have received a letter telling us of the amount we are due etc? Perhaps its different case for employees that have left hbos??

molerat

The lump sum will not be an option for current employees unless they opt out of the current pension scheme which would probably be a very silly move.

thesun_2

so am i right to believe that i will get this lump sum, as i am no longer an employee, and therefore exempt (from the condition which says that you can only have the lump sum if the employer hasnt contributed for 5 years?)?

thanks!

molerat

thesun wrote: »

so am i right to believe that i will get this lump sum, as i am no longer an employee, and therefore exempt (from the condition which says that you can only have the lump sum if the employer hasnt contributed for 5 years?)?

thanks!

That is an incorrect statement, read the link in my post above.

thesun_2

molerat wrote: »

That is an incorrect statement, read the link in my post above.

thanks, im just finding the wording in the text a bit difficult to decipher, as its not got many commas!

(18 month old baby waking at 6am!)

i think ive got the idea now though

thanks again

2sides2everystory

Be very wary of financial services companies bearing "gifts".

Be extremely wary if you are part of or have been part of the business.

Be paranoid if it is anything to do with your pension especially if it talks about any proceeds of winding up a pension scheme. If for example you are a deferred member (someone who has left the company but hasn't retired yet) of a defined benefit pension scheme which is being or has been wound up, it almost certainly will automatically mean you are being discriminated against in favour of existing retired members of the scheme who will have alternative expensive annuities bought for them first before what's left is allocated in untold ways to deferred members.

By a letter introducing the idea of releasing cash from your pension or suggesting you are entitled to some windfall it would seem to me that you are having the wool pulled over your eyes.

thesun_2

2sides2everystory wrote: »

Be very wary of financial services companies bearing "gifts".

Be extremely wary if you are part of or have been part of the business.

Be paranoid if it is anything to do with your pension especially if it talks about any proceeds of winding up a pension scheme. If for example you are a deferred member (someone who has left the company but hasn't retired yet) of a defined benefit pension scheme which is being or has been wound up, it almost certainly will automatically mean you are being discriminated against in favour of existing retired members of the scheme who will have alternative expensive annuities bought for them first before what's left is allocated in untold ways to deferred members.

By a letter introducing the idea of releasing cash from your pension or suggesting you are entitled to some windfall it would seem to me that you are having the wool pulled over your eyes.

what exactly do you mean?

i am having the full value of my fund plus money it has made, paid out to me as a lump sum.

i dont understand?

2sides2everystory

I mean that the "full value of your fund" will almost certainly have been a moving feast.

Do you know what it was (as a "transfer value") at various points whilst you were employed by HBOS, what it was when you left, and how it has performed or varied since?

Do you know how the "full value" sum you are being offered was calculated as part of the wind up?

I am no expert, but I have worked in the industry and know from experience what a bunch of crooks runs most of it and is usually behind these pension wind ups.

I have defied my ex employers and cautioned them that they unilaterally change my pension arrangements at their peril. It is quite amazing how they then have to exercise their minds when target fundholders like me do not automatically sign on any dotted lines after they simply wave a bit of our own cash under our noses.

On the other hand, you might wish to sign and not concern yourself with getting to the bottom of what they are doing - that doesn't mean you'd be wrong, just that you'd decided it was right for you. You have the benefit of the words in the letter and the detail of exactly what arrangement you thought you were part of whilst employed with this particular employer. I don't so I could be barking up a wrong tree.

My comments stand however. It may be easier said than done but do keep your eye on the ball - afterall, it is your ball.

lawrie28

thesun wrote: »

hi i wonder if anyone can help me.

i recieved a letter this morning to tell me i could take a winding up sum from my pension.

i no longer work for the company and havent since december 2010 (after finishing maternity leave).

my first question is..

as i am not a tax payer in this financial year and the lump sum is £6424.92 - will i pay tax?

my second question is..

there is a piece of text in the letter which makes me think that i may not actually get the payment!

"by law a payment can only be made to you if the total value of your account is less than £18,000, and your current employer (if you have one) has not paid contributions on your behalf in to the scheme in the last 5 years"

now...i have only finished working there in the last year and they always matched my contribution (there or thereabouts), so does that mean i wont be elligible for the lump sum? or does the fact that i no longer have an employer make this point invalid to me?

i will be able to find out when i call up on monday (lines are closed weekend), but i would love to know today!

thank you very much in advance!

Yes, you are eligable.

If you read your letter it will tell you the breakdown of the tax they will pay on your behalf, before they send you the settlement lump.