Advice re:Transfer/Pension Release

debs154

I currently have approximately £18k in a pension which I am drawing down aproximately £1700 (net) per anum. I took 25% when I was 50 before it changed to 55.

This will reduce to about £800 when I'm 56 according to the paperwork I get annually.

I am 54 - 55 next July and I know it's probably unwise to draw down this cash right now but I need the money.

I also have approximately £5k in another separate pension fund. I ideally would like to release 25% of this when I reach 55 and put the rest into the fund with £18k in it.

Is this possible?

Or if I transfer the £5k now will this mean the annual draw down will increase when I reach 56.

My financial circumstances will hopefully improve with paying off some debts over the next 2/3 years but I would like to maximise my income from the pensions between now and then.

Any advice would be gratefully received.

Thanks

dunstonh

I also have approximately £5k in another separate pension fund. I ideally would like to release 25% of this when I reach 55 and put the rest into the fund with £18k in it.

Is this possible?

Many pensions will accept uncrystallised funds and crystallised funds in the same account. Not all though.

Or if I transfer the £5k now will this mean the annual draw down will increase when I reach 56.

You cant as you are not 55.

CannySaver_2

Hi

Surely the bigger question is why you are in Income Drawdown with such a small fund, surely the charges are easting away significantly at your fund?

Do you have other pension provision? I'd suggest (nicely) that this one isn't going to last long!

The Canny Saver

atush

I am quite frankly worried too like CS.

Why are you taking pensions at 53 yet are in debt? I think you need to work and pay off some of those debts, it is just going to get harder as you go on. The debt free board is really nice and helpful and they can help you find a way out of your mess.

debs154

dunstonh wrote: »

You cant as you are not 55.

Sorry - are you saying that I can't transfer the £5K until I'm 55?

In answer to the other questions - I am working to pay off the debts and have taken advice regarding this.

As said in my original post I am aware that this is not perhaps the best way forward in the long term, but would like to know if

a) It is possible to release 25% of the £5k or is it too small a fund for this?

and

b) if this is not possible can I transfer the £5k pension (I am no longer paying into the scheme) into the £18k one - if this is possible would that increase the annual drawdown?

Many thanks for the input and advice so far and I don't want to appear ungrateful but just wanted to know if anyone knew the answers to the questions as they stand.

Also is it possible o transfer the money if this is the only option without the use of a financial adviser?

Thanks in advance

atush

You can't get the 25% unitl you retire early at 55.

You can transfer a pension to another provider, but cant transfer it to your drawdown as this is classed as a retirement option and you can't 'retire' with that pension til you are 55. But when you can transfer it, it will increase what you can draw down and hopefully will icnrease it in the meantime.

And great that you are tackling the debt as you need to be debt free before you really retire.

debs154

Atush
Thanks a lot - I thought I had read somewhere that you couldn't take the 25% from a sum as small as £5K - so just to confirm are you saying I would have to retire (ie stop working) when I am 55 to access the 25% ?

atush

No, you dont' have to stop working. You just need to take 'early retirement' on that pension as you did with the other one at 50. I don't think you can take it all in cash aas you already had one pension taken? Not sure on this point.

I hope you don't mind our concern. You 'retired' 3 years ago with the one pension you have in drawdown- and I assume got a 25% lump sum then. Which you don't have now and are in debt. So we don't want to you spend new 25% aswell, as you don't have a whole lot of pension left. And if you aren't working full time now, but part time- try to pick up more hours.

debs154

Thanks for your concern - the last few years have been difficult with major changes in circumstances. The future looks a lot brighter I do work full time -my income is set to increase by a little but steadily over the next few years and I am paying into a local authority pension scheme. I will eventually inherit some money. It's the short term that the issue - I will be debt free in 2 - 3 years and will then stop the draw down.

Thanks so much for your help.

atush

Oh Thank goodness! A LA average salary scheme? In any case it is a new pension and that takes some of the sweat off our briws for you ;-)! that is a good pesnion to be paying into now.

Your plan now sounds a lot better (esp if you can stop the drawdown and let it accumulate).

gadgetmind

I'm puzzled by a £1700 net drawdown from an £18k pension pot - how is this possible?