Can I cash in an old pension plan?

SuSu1871

Hi everyone

I must admit to getting quite confused when it comes to pensions, and I've only just got my head round my personal finances in the last six months, so understanding pensions seems a long way away...

Anyway, I've just received an annual statement for an Appropriate Pension Plan with Reliance Mutual. I presume this is and old company pension scheme as they're the only pension schemes I've taken up. I don't know which company scheme it's from, or when I started it.

The statement says this:

Accumulation Units - Series S
Pensions Managed - Units 1651.502 @ 388.4p per unit
Total fund value is £6,414,43

They estimate my future pension at £59,600, which would buy me a yearly pension of £2,030. I'm 35 now, so they're basing my retirement date on 25 years away.

What I was wondering is this... Can I cash in this pension and use the money to pay off some debt? If not, can I transfer this to my new company pension scheme? Or...am I best to keep things as they are and look forward to a very small amount of extra pension when I retire?

I have contacted Reliance Mutual, but they haven't replied to me and their website is pretty poor, so I can't find out anything from there.

Apologies to everyone if this has been covered umpteen times before. I have tried searching these pages for help, but as I said, pensions are beyond my understanding at the moment.

Grateful for any help/advice.

SuSu1871

jamesd

You can only cash in a pension within two years of starting the job and then you often don't get back the full value. Once you're 55 you'll be able to take 25% of the value without paying tax on it and the rest must remain invested or be used to purchase an annuity to provide income in retirement.

You might be able to transfer it to your current company scheme if both are money purchase schemes. If the choice of investments in the new scheme are good that could be worth doing. Alternatively you could switch to a different personal pension that does offer a good range of investments. Before switching you should find out if there are any guarantees associated with the pension, like minimum guaranteed annuity rates. Those could be worth keeping, since annuity rates have been falling.

It appears that you have the Pensions Managed Accumulation S fund from this list and Trustnet provides a performance chart and ranks it as 125th best performer out of 233 in its category over the last 3 years.

Unless there are guarantees you can probably do better, particularly if you use some of the higher risk options that appear suited to your age, if that's appropriate for your risk preferences.

SuSu1871

Thanks for your advice :beer: . I'll make an appointment with one of our company pension advisers and see what they say. I don't know what kind of pension BP has - I just know I'm in it! Jeez, it's pretty bad that I haven't got a clue what my future finances will be like - I've been focusing entirely on getting debt free (it's a start, though)

SuSu1871

dunstonh

I'll make an appointment with one of our company pension advisers and see what they say

Probably not a lot as they are not authorised to give advice on pensions from third parties.

SuSu1871

Thanks for your reply. Might they be able to advise as to whether I can transfer the Reliance Mutual pension to my BP pension?

I'm so confused about pensions that I think it'll just be easier to add this to my company one rather than have different pensions in different places. Although, it'd be much better if I could just cash it in, but I think that's too much to hope for...

dunstonh

Might they be able to advise as to whether I can transfer the Reliance Mutual pension to my BP pension?

They will be able to say Yes or No to whether they can take it. They wont be able to tell you if it's better they have it or better left where it is.