Small pension we forgot about

wendfd

My husband has just bought an annuity with the two pension funds he had and has begun drawing his pension. He has remembered another tiny pension, is it too late to add this to the annuity. How can he get the funds from this, as his annuity if more that 18000.

Loughton_Monkey

I can't see that any harm has been done.

Although 'tiny', the first thing to look at is what type of pension it is. There are two types in particular that it could be:

(a) A 'Final Salary' [or similar] type of scheme arising from a short period of employment in the past.

(b) An old 'Money Purchase' pension plan which comes with 'guaranteed' annuity rates.

In either of those cases, then you simply approach the administrators and start to take the benefits. It is most unlikely that transferring to another annuity provider would be desirable.

If it is an 'ordinary' money purchase scheme with no guarantees, then the following choices exist:

1. One option is simply to leave it where it is for the moment. It would continue to 'grow' and it might be handy to invoke it at a later age (say 70) when the annuity rate will be higher and it will provide a small boost to the existing (flat?) pension.

2. If the fund is large enough to 'interest' an IFA, or whoever set up his main annuity, then transfer it to whoever is paying the best rate.

3. If it is so trivial as not to interest anyone, then simply crystalise the pension with the provider and accept their annuity rate. It may not be the best market rate, but one assumes we would only be talking about 'shillings'.

kidmugsy

Isn't one going to be allowed to withdraw up to two pension pots valued at less than £2k each, with 25% tax-free and the rest taxed as income? Has this come into law yet?

molerat

kidmugsy wrote: »

Isn't one going to be allowed to withdraw up to two pension pots valued at less than £2k each, with 25% tax-free and the rest taxed as income? Has this come into law yet?

Yes, it is operative now, from 6 Apr.