We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide

Leaving early to start a business can I cash my pension?

Apolonation
Apolonation Posts: 304 Forumite
in Pensions, annuities & retirement planning
Hi would appreciate some of your thoughts. I'm currently on Nuvos Pension scheme, I have been paying contributions for 3 years.

I'm going to be starting a business and am many many years away from retirement.

Can I get a refund on my contributions over the last 3 years and just annul the pension? Or is it locked in until I'm 65? If it is locked in as I have only paid 3 yrs contributions, what will happen at 65?

I have read the cashing in sticky but couldn't find any info about refund vs cashing out - I understand I wont be able to cash out the full pension (my contributions + employers) but I want to know if I can get the money I've already paid in, and if not, how the 3yrs will eventually be paid back.

e.g. If I'm self employed and the money is in the business, I don't plan to be paying into a pension any longer.

Thanks
whinge intr.v. whinged, whing·ing, whing·es Chiefly British To complain or protest, especially in an annoying or persistent manner.

Comments

  • BobQ
    BobQ Posts: 11,181 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Combo Breaker
    http://resources.civilservice.gov.uk/wp-content/uploads/2011/09/L2-Final-April-2009_tcm6-7446.pdf

    Try reading this......
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
  • BobQ
    BobQ Posts: 11,181 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Combo Breaker
    Apolonation wrote: »
    e.g. If I'm self employed and the money is in the business, I don't plan to be paying into a pension any longer.

    Thanks

    What makes you think that self-employed people do not need a pension?
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
  • McKneff
    McKneff Posts: 38,857 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    In short, no, you cant cash in your pension, it is invested for your retirement.

    It isnt a savings account. Once it is in a pension fund it ceases to become yours.

    In your best interests you would be better adding to it, will you really want to live in poverty just getting the state pension.
    make the most of it, we are only here for the weekend.
    and we will never, ever return.
  • dunstonh
    dunstonh Posts: 121,405 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    What makes you think that self-employed people do not need a pension?

    They actually have a greater need for a pension as the self employed do not qualify for the full state pensions. Just the basic.

    So, someone going self employed and planning no retirement provision is looking forward to an income of £5k p.a. in retirement in todays terms
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • CannySaver_2
    CannySaver_2 Posts: 482 Forumite
    dunstonh wrote: »
    They actually have a greater need for a pension as the self employed do not qualify for the full state pensions. Just the basic.

    So, someone going self employed and planning no retirement provision is looking forward to an income of £5k p.a. in retirement in todays terms

    That's assuming they don't turn out to be Richard Branson ;)

    I'd agree with you though paying into a pension (or at least making provision for your retirement) when you are self employed is of particular importance. It's also worth noting that a pension can, in certain circumstances, really help a business, for example buying commercial property via a SIPP or making loans via a SSAS. They can also be a useful source of start up capital if you are looking for an investor.

    One question though, when the new flat rate state pension kicks in, do you believe that employed and self employed people will all get the same state pension? Providing of course they have paid the necessary NI contributions.

    The Canny Saver
    Always looking for a good deal on my savings, generally risk averse, but always interested in new ideas and new ways of doing things.
  • dunstonh
    dunstonh Posts: 121,405 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    One question though, when the new flat rate state pension kicks in, do you believe that employed and self employed people will all get the same state pension? Providing of course they have paid the necessary NI contributions.

    The proposal is that they will get the same. However, it does make you wonder how they can do that and still say the scheme is cost neutral. If it is, then who are the losers?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • JoeCrystal
    JoeCrystal Posts: 3,455 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    dunstonh wrote: »
    The proposal is that they will get the same. However, it does make you wonder how they can do that and still say the scheme is cost neutral. If it is, then who are the losers?

    Hmmm... maybe the Class 2 and Class 4 National Insurance contribution will be increased to cover the shortfall?

    Cheers

    Joe
  • BobQ
    BobQ Posts: 11,181 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Combo Breaker
    dunstonh wrote: »
    The proposal is that they will get the same. However, it does make you wonder how they can do that and still say the scheme is cost neutral. If it is, then who are the losers?

    Well those who have no other income will presumably be less able to claim benefits from the increase and those that have other income will pay more tax than they otherwise would?

    Or maybe its another half baked plan driven by the expediencies of the coalition partners negotiations that needs refining later.:D
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 354.6K Banking & Borrowing
  • 254.5K Reduce Debt & Boost Income
  • 455.5K Spending & Discounts
  • 247.5K Work, Benefits & Business
  • 604.3K Mortgages, Homes & Bills
  • 178.6K Life & Family
  • 261.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.7K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.
Update Your Picture