small pension

spukfiders

I have a small pension with Phoenix life worth about £13000.00. I am 63 and would want to cash the policy in, however it is under the £18000 threshold and they say that because I am in receipt of a police early retirement pension I can only have the 25% in cash. Does this pension count towards the £18000 threshold, can anyone advise.:mad:

McKneff

Triviality rules are that all pensions are calculated together.

So yes, you would only be able to take 25 per cent lump sum and turn the rest into an annuity.

xylophone

http://www.pensionsadvisoryservice.org.uk/news/2012/april/new-rule-for-cashing-in-small-pension-pots

Do you have guaranteed pension income of more than £20000 a year (or will you have after state pension kicks in?
http://www.hmrc.gov.uk/pensionschemes/pen-options.htm

spukfiders

thanks xylophone, my pension is less than £10000, after tax, but when i reach 65 in 2014 i will get state pension as well, if i live that long:Dha. looks like its %25 then.

xylophone

http://www.pensionsadvisoryservice.org.uk/annuities-and-income-drawdown/flexible-drawdown
Our understanding is that secured pension income is taken as the gross annual amount of pension (i.e. before any income tax is deducted). The requirement to have a secure pension income of £20,000 might change in future to increase the level of income required.

dunstonh

spukfiders wrote: »

thanks xylophone, my pension is less than £10000, after tax, but when i reach 65 in 2014 i will get state pension as well, if i live that long:Dha. looks like its %25 then.

So you are significantly through the triviality limit. So, 25% TFC and income from rest is what it is for you.