Advice on Pension Pot below £18,000

dunstonh

The annuity they are offering is so small it is not worth having and she will have to live well into her 80's to get her money back

That is unlikely. pensions usually break even much quicker than that on the amount paid in.

Maybe put the investments into something higher risk and more volatile. If it goes down then exercise triviality. If it goes up then it increases the amount.

lamb1102

johnbanks1948 wrote: »

My partner is 60 in august and has had a pension forecast showing a pot of £18150. This is above the trivial amount just. Is there anyway i can get this reduced to under £18K so she can claim trivial pension. The annuity they are offering is so small it is not worth having and she will have to live well into her 80's to get her money back

I wonder if you could transfer to another provider through an ifa and the charges would take it below the 18k limit. Not sure but it seems simple enough .

dunstonh

lamb1102 wrote: »

I wonder if you could transfer to another provider through an ifa and the charges would take it below the 18k limit. Not sure but it seems simple enough .

The theory is good but I can imagine that the IFA would be left open to dodgy consumers putting in a complaint afterwards and probably getting it upheld. (not saying the op would be dodgy but in this compensation culture age, you have to think like that)

johnbanks1948

dunstonh wrote: »

That is unlikely. pensions usually break even much quicker than that on the amount paid in.

Maybe put the investments into something higher risk and more volatile. If it goes down then exercise triviality. If it goes up then it increases the amount.

Thanks for your reply, have checked the figures they are offering and it will take 22 years ie £821 per year. It is a personal pension with protected rights with prudential. Can this be transferred as there are only 5 months to maturity.
Thanks

dunstonh

johnbanks1948 wrote: »

Thanks for your reply, have checked the figures they are offering and it will take 22 years ie £821 per year. It is a personal pension with protected rights with prudential. Can this be transferred as there are only 5 months to maturity.
Thanks

ahh. I see you are comparing it against the current value. Not the amount you actually paid in.

It can be transferred but it wont help you get below £18k unless you take investment risks and wait until there is a drop. You dont have to take it in 5 months. You have to take it before 75.

SippTechie

Just to clarify re pensions in payment, they're not valued at 20 X pensions in payment for the purposes of triviality.

If the pension started after 5 April 2006 the calculation has nothing to do with any multiple of the current pension. The calculations is based simply on the percentage of the lifetime allowance that was used up when the benefits were first taken.

If the pension started before 5 April 2006 it is based on 25 X the pension that was in payment at 5 April 2006.

The post 5/4/06 rules create the anomaly that someone taking £18,000 of benefits in the current tax year (1% of current lifetime allowance) will see these fall in value, for triviality purposes, to £15,000 (1% of next year's lifetime allowance) from next year.

Theoretically, someone with benefits today worth £21,600 (1.2% of current lifetime allowance) could start benefits today and then take trivial commutation in a week's time. This is because the crystallised £21,600 would only be worth £18,000 for trivial commutation purposes from the day after tomorrow.

All irrelevant for the OP because trivial commutation, as has already been mentioned, is only available for those aged 60 and over.