Can I cash in my pension?

le_loup

Hasn't all this been FULLY answered on the other thread which you started?

maseman141044

Hi id be grateful for any help....my dad whos retired (09/09)has received notice of a pre-95 pension plan he didnt know he had....was with norwich union,now aviva ,its a plan he is contracted out of.....says total fund is over 6k ....transfer value 5.5k.....anyone advise as to his options pls....ie can he take money and what are likely penalties?...thanks

dunstonh

maseman141044 wrote: »

Hi id be grateful for any help....my dad whos retired (09/09)has received notice of a pre-95 pension plan he didnt know he had....was with norwich union,now aviva ,its a plan he is contracted out of.....says total fund is over 6k ....transfer value 5.5k.....anyone advise as to his options pls....ie can he take money and what are likely penalties?...thanks

We dont know the contract terms. So, cannot offer opinion on the contract terms.

How old is your Dad. What other pensions does he have? Did he start them before 2006 or after 2006?

Gettingeven

Gettingeven wrote: »

Hi, I've been thinking about what you wrote above.

If I accept that what you say is true, I would lose all that taxable income should I live until I'm 90. However, shouldn't one also take into account that I would be saving £500 per month in expenditure now, when it's most needed? This would happen because I would repay all my loan committments. I would be mortgage and credit card free, without actually touching that part of the pension fund transferred into a SIPP to be used for pension, which could continue to grow until I used it for drawdown, or to purchase an annuity, when I finally retire?

I would think that there are a lot of people whose lives aren't quite as simple as is sometimes made out on here. Life isn't black and white, it's complicated for lots of people. If you offered these people the option of being completely debt free and worry free, with all their income still available for the next 10/11 years before they fully retire, I'm sure alot of them would take it. Suppose my transfer value is, say, £180,000. I could transfer that to a SIPP, take the £45,000 cash at 55, repay all my loans, and still have the remaining £135,000 invested for a further 10 years. In addition to this, my existing company pension scheme will receive £500 per month into it for the next 11 years (increasing each year, and started 18 months ago).

Personally, I'm not that concerned about income when I'm 80, or 90. I need it now. To live. I suspect my position is not uncommon, and I think that sometimes we have to make hard choices. As long as the consequences are clear, then what's the problem? A friend of mine had obtained a transfer value from his final salary scheme 3 years ago and it has since risen from £120,000 to £186,000 because of the falling gilt yields. This is very tempting. When yields start to rise, transfer values will fall, and I could miss the boat, so to speak.

Anyway, I haven't obtained the transfer value yet. I'll let you know what it is in the next couple of weeks.

Well, I received my transfer value today. It has increased from £115,000 in Jan. 2010 to £155,000 in May 2012. An increase of £40,000 in just over 2 years. Still tempted!

sandraroffey

pensions, pensions, pensions. the companies that run the pensions are a law unto themselves. prudential wouldnt let me have my pension as a lump under the triviality rules, when i retired almost 5 years ago.

i receive LESS than £400 A YEAR. and like a previous poster, could have paid off absolutely everything, but they just wouldnt do it, even though i am entitled to ask to have it that way. Not in their policy apparently. i get less than £39 per month and it must cost them more than that to administer it!! its a joke.

dunstonh

pensions, pensions, pensions. the companies that run the pensions are a law unto themselves.

No they are not. They are subject to the law.

prudential wouldnt let me have my pension as a lump under the triviality rules, when i retired almost 5 years ago.

Why?

i receive LESS than £400 A YEAR. and like a previous poster, could have paid off absolutely everything, but they just wouldnt do it, even though i am entitled to ask to have it that way.

You may have been entitled to ask but it doesnt mean you were entitled to have it.

Not in their policy apparently.

Pru have applied triviality rules correctly since the 2006 rule changes. So, something must have meant you were not eligible for triviality. What was it?

sandraroffey

their letters to me said that although the triviality rules were there, it was also down to the individual companies as to whether they apply it, and at that time, it wasnt in their policy to do so. thats exactly what they said.

dunstonh

sandraroffey wrote: »

their letters to me said that although the triviality rules were there, it was also down to the individual companies as to whether they apply it, and at that time, it wasnt in their policy to do so. thats exactly what they said.

I am trying to think back and there was a short lag period after the rule change where some didnt implement on day one. However, close to the rule change date were you?

sandraroffey

no idea i'm afraid. to far back now to worry about. but they were quite insistent. so left it. i think it was the year after i moved here, which was late 2005. so would have been spring/early 2006.

dunstonh

which was late 2005. so would have been spring/early 2006.

The rule change came in April 2006 and was largely in place with most providers either immediately after that date or within a few months. Pru have been known to unwind an annuity retrospectively. It would have to be post April 2006 and maybe a push a bit further behind the call centre lines (front line will nearly always say no as they lack discretion).