Can I cash in my pension?

atush

If you are in ill health and you don't want to leave your family with your debt, it might be best to

Invest in life assurance (at least before you become ill as that is what it is for)) and after to got to CAB and other agencies to make sure you are claiming all your allowances.

atush

gadgetmind wrote: »

On some threads hereabouts, that bot's English would be way better than a good 50% of the humans involved!

Bet you wish you wish you'd programmed this bot lol.

I like that you have your eye on the poetry of good work, even in this case lol.

afcw

Help and advice required and appreciated-

I am 54 years old , I am unemployed , I accepted voluntary redundancy in Dec 2012 whilst working for a Scottish police force as a CIVILIAN worker. ( not the new single police force)
As such I now receive a yearly pension of exactly 4k , this is paid monthly and I pay income tax on this pension .
I would appreciate help with regard to the following queries.
1- CAN I CASH THIS PENSION IN ?
2- IF NOT WHY NOT ?
3- I RECIEVED THIS PENSION PAYMENT AGED 53
4- THIS PENSION IS PAYED TO ME BY STRATHC***DE PENS**N FUND
5- AM I STUCK WITH THIS MONTHLY INCOME FOR LIFE ?
6- I WOULD PREFER TO CASH ALL OR AS MUCH AS I CAN IN AS MY PRESENT FINANCIAL SITUATION IS POOR
7- I SUFFER FROM MENTAL HEALTH ISSUES AND WISH TO CASH THIS SOURCE OF INCOME IN ASAP
8- I AM AWARE OF PENSION AGES OF 55 AND 60 BEING QUOTED BUT I RECIEVED THIS REDUNDANCY PAYMENT PENSION WHEN I WAS 53.
9- I ALSO RECIEVED A SMALL CASH LUMP SUM AT THE SAME TIME AS MY PENSION FROM THE SAME SOURCE BUT CHOSE TO TAKE THE SMALLER CASH SUM OPTION AND ACCEPT THE HIGH ANNUAL PENSION OF 4,000 PDS , WHICH IS TAXABLE EACH MONTH
10- WHAT DO OR CAN I DO TO ACHIEVE SOME FORM OF CASH LUMP SUM.
11- I AM ONLY SAYING THAT THE PAYING SOUCE IS SCOTTISH IN-CASE THERE ARE DIFFERENT RULES IN ENGLAND AND WALES
12- IS THIS MONTHLY PAYMENT FROM AN ANNUITY OR A PENSION?
13- I WILL BE SEEING AN INDEPENDANT FINANCIAL ADVISOR SHORTLY BUT WISHED TO HEAR THE VIEWS OF MEMBERS AS WELL

thank you

le_loup

A pension is a pension - not a savings account. No you can't cash it in.

dunstonh

1- CAN I CASH THIS PENSION IN ?

No

2- IF NOT WHY NOT ?

because it is a pension. Not a savings account.

5- AM I STUCK WITH THIS MONTHLY INCOME FOR LIFE ?

Yes. Which is the whole point of a pension.

10- WHAT DO OR CAN I DO TO ACHIEVE SOME FORM OF CASH LUMP SUM.

nothing.

12- IS THIS MONTHLY PAYMENT FROM AN ANNUITY OR A PENSION?

it will be a scheme pension not annuity.

13- I WILL BE SEEING AN INDEPENDANT FINANCIAL ADVISOR SHORTLY BUT WISHED TO HEAR THE VIEWS OF MEMBERS AS WELL

An IFA cant get round the rules.

Perhaps take a visit to the debt free wannabee section of this board as they have some very good people in there who can help those in financial difficulty. However, you cant access the pension the way you want. So, that is off the table.

mark55man

I am not an expert, and there are always technicalities, but broadly


* Through misfortune you had to retire early - as part of this you received what seems to be a final salary pension earlier than normal (unusual but not rare)
* This amount will have been calculated by redundancy and pension rules
* I assume this is Final Salary (aka Defined Benefit) as otherwise you would have gone through an annuity process which whilst confusing doesn't seem to match the story
* Even if you had still been in the scheme must professional advisors would not support you changing from a DB to a money based scheme (those willing to do so are normally scammers). You have secured a small but useful sum of money for the rest of your life (which I should imagine has some protection from inflation)
* Generally you made the right decision in taking the higher income rather than the higher lumpsum - I certainly doubt that you can revisit this
* if your total income (wages, benefits, pension) are under your personal allowance you shouldn't be paying tax - but some pension companies assume you are in receipt of other income so take the tax off - you either need to convince them not to or get the money back from HMRC
* If you have a pressing Bill/Debt - you may be able to go to the bank and arrange some sort of loan (or could take out/extend a mortgage) based against this as security - but it is normally hard to turn a stream of cash into capital now
* If your concern is that this income is preventing you from being entitled to other benefits then I am afraid you are probably out of luck (although 4K a year would normally equate to an annuity fund of about 100K) so you would probably be out of luck anyway in that regard either way round


You may wish it were larger and your immediate circumstances may be stressful but a 4K a year pension will nicely supplement the state pension in due course so you must be careful not to do something this yearthat you may regret for a very long time


EDIT: Posted after dunstonh - who is a frequent poster and really knows all the rule. His suggestion is that people on the benefits or the debt free boards may be useful to deal with any current pressing - particularly there are some specialist support groups who help with mental health and money / debt


EDIT2: If you have a specific issue you could also set up your own thread with some specific questions as this is a general high level board

jamesd

afcw wrote: »

5- AM I STUCK WITH THIS MONTHLY INCOME FOR LIFE ?

Maybe not. It might be possible to renounce your entitlement to it and receive nothing instead. If you do this and would become entitled to means tested benefits or higher means tested benefits, deprivation of assets rules would almost certainly mean that you would be treated as having the income anyway, for benefits calculations.

afcw wrote: »

7- I SUFFER FROM MENTAL HEALTH ISSUES AND WISH TO CASH THIS SOURCE OF INCOME IN ASAP

Have you been diagnosed with any medical condition where the doctors treating you say that you are likely to die within one year?

afcw wrote: »

10- WHAT DO OR CAN I DO TO ACHIEVE SOME FORM OF CASH LUMP SUM.

The usual ways of borrowing, personal loans, credit cards and mortgages, all subject to affordability checks.

xylophone

You say that you are paying tax on your pension and that you are unemployed - you have checked whether you should be paying tax/you are not overpaying tax?

You say that your pension is exactly £4000 per annum but presumably it is inflation linked?

afcw

Many thanks to the above posters who have explained the various options available to me.

I accept that 4k for life is a good thing , but this amount , 260 a month , takes me over , ( as per usual just over ) my allowance for income tax.

I am not in receipt of any benefit.

I have mental health issues , but they are not like-threatening , ie my body is working fine , its just my head that is heavily confused with life.

I was only trying to find out , rightly or wrongly , if I could achieve a cash input now by parting with this pension.

I know the long road is always better , but right now I would love to take a wee short cut.

I am totally unaware of things financial and was just hoping that I could avail myself of some cash via this source.

Thanks again and any other views / thoughts / advice are more than welcome.

jamesd

It isn't a problem to be just over your personal allowance for income tax. All of the income up to that amount is tax free. The part above it is taxed at the basic rate of 20%. Sometimes people wrongly think that going over the personal allowance causes all of their income to be taxed but it doesn't work that way.