Pension Refunds

haz_bow

Hi,

A few years ago I worked for the NHS for a couple of years and paid into a final salary pension scheme.

I was informed that if you were paying for under 2 years you can get a refund on your contributions. Unfortunately I was about a week over 2 years and so refused.

Is there anyway to get this money out of the pension? Would it work transferring the pension to a private pension and then withdrawing from there or can I not do that?

Thanks.

Zelazny

No. Once you've been in the scheme for over two years, you can't get back out. You could transfer the pension to another scheme, but they'd not be allowed to let you take any money from it until you're at least 55, and transferring out of the NHS scheme is almost certainly a bad thing to do.

Besides which, you do not want a refund. All you would get is the value that you've paid in, less any tax or NI that is due. You would lose all of the employer contributions (which probably amount to around 80% of the value of the benefits).

haz_bow

Damn. That's unfortunate. I was only there 2 years on quite a low wage at the start of my career, so even with the employer contributions its not going to be worth much when i'm 55....thats still 30 years away for me. I'm just trying to get cash from where ever I can to help towards the massive deposit needed for a first time house buyer these days.

dunstonh

Would it work transferring the pension to a private pension and then withdrawing from there or can I not do that?

Technically, you can do it. However, it will need an IFA to sign off on it and the cost of the IFA to do such a high risk transaction will probably be similar to the transfer value. So, in reality, you cant do it.

its not going to be worth much when i'm 55

What makes you think you will be able to afford to retire at 55?
it wont be much as its just two years but it is increased each year to maintain a real terms benefit.

I'm just trying to get cash from where ever I can to help towards the massive deposit needed for a first time house buyer these days.

Just remember that you will always have an excuse not to plan for retirement. First it is saving for deposit, then it is furnishing the house and the struggle of the early years, then its either another house move to something bigger or family. Then when wake up one day and realise you are in your 40s and kick yourself for not starting your retirement planning earlier when you realise the cost of what you have to pay at that age compared to the pittance you can get away with in your 20s.

atush

It is best left where it is, and will be worth something good when you come to retire- esp is you don't carry on saving for a pension (which seems unlikely given your posts).

Buying a home is very important, but isn't all important. It is one of 4 things you need to do for life/retirment. Pensions, a min of 6 months cash savings, and S&S ISAs and other investments are the other 3.

Consider yourself like a person in debt. Go to the budgeting board or even the Debt free board and post an SOA. The good folks there wil help you trim your spends and you can save more. Write a daily diary of every Penny you spend (even for parking, sodas, coffees, newspapers etc). See where you are wasting cash and what you can cut out.

jamesd

It's not economic to do this transfer.

It doesn't take a massive deposit for a first-time buyer these days in most parts of the country. Flat deposits end to be fairly low with 10% deals and shared ownership deals available. If you insist on going for a house it will take more but that's not required, you can start out with a flat instead.

thenudeone

haz_bow wrote: »

Is there anyway to get this money out of the pension? Would it work transferring the pension to a private pension and then withdrawing from there or can I not do that?

It's a pension not a savings account.

See here: https://forums.moneysavingexpert.com/discussion/3447527

Your final salary-linked pension is very valuable and is simply not available to most people any more.

I'd love to have some of my retirement income guaranteed and not have to worry about investment returns, interest rates, increasing life expectancy, or falling annuity rates.

Be grateful for what you have!