what can I do with this pension?

kenb2

I have a pension with the Prudential from years back, carried over from Scottish Amicable can`t get any sense from the Pru, only a nice man in god knows where.
My problem is that its worth only about £12.5k when it matures in July on my
60th. I would like to take it in cash as I`m been out of work for 2 years [ I get no benefits, job centre said at your age no point in coming in just to sign on,]
All the guy at the call centre does is try to flog me something else, or transfer it to another policy.
I don`t want to do this, it`d do better in the building society, and I`d rather spend it before I pop off.
Got some waffle about being able to take only 25% of it in cash,
can any one shed any light please?
Thanks

dunstonh

All the guy at the call centre does is try to flog me something else, or transfer it to another policy.

Are you sure? Pru are closed for new business (from in-house) and have no financial advisers to facilitate any sales of new life and pensions policies.

I don`t want to do this, it`d do better in the building society, and I`d rather spend it before I pop off.

Actually, Pru's bonus rates are higher than most savings accounts.

Got some waffle about being able to take only 25% of it in cash,

That is correct unless you are applying under trivial commutation. To qualify for this ALL your pensions must be worth less than £16,000. If this is the case as Pru for the forms for trival commutation. You will not get all the money as the Govt tax 75% of it.

EdInvestor

You can't cash it in, unless you have absolutely no other pensions (except state ones), in which case you can under the trivial rules.You will get 25% tax free, the rest net of tax.

Otherwise, if you do have other pensions, then you can take benefits from the policy, including 25% in cash and an annuity.Does it have a guaranteed annuity rate attached? These are often higher than current interest/annuity rates and can be a valuable benefit.

kenb2

Thanks Dunstonh,
Basically I could hardly understand the guy at the other end anyway, and the line was the usual tincan and string quality.
He was on about other annuities as far as I could make out, or transfering to one.
All my pensions are less than 1600k, I have only this one and sod the building society rates, I need the cash.
I do not want another pension scheme.
How can I get hold of it? 75% tax seems incredible, how do they calculate it?
I already paid tax on the earnings from which I paid into it years ago.
Beginning to sound like I bought yet another pup from a pension seller.

Also as long term unemployed surely that`d count against tax?

EdInvestor

kenb2 wrote: »

How can I get hold of it?

Ask the pru to send the forms to apply for "trivial commutation".

75% tax seems incredible

25% of the total fund will arrive as tax free cash.The other 75% will be taxed at basic rate. Possibly you can claim this back as a non-taxpayer.

I already paid tax on the earnings from which I paid into it years ago.

Unlikely - pension contributions get tax relief upfront, then they collect the tax when the income is paid out in retirement.

dunstonh

Basically I could hardly understand the guy at the other end anyway, and the line was the usual tincan and string quality.
He was on about other annuities as far as I could make out, or transfering to one.

Sounds like he is covering the bases. They cannot give advice on the phone as they do not hold authorisation to do so. The best they can do is give you the options on their contract which are annuity purchase, open market option, transfer and trivial commutation.

How can I get hold of it? 75% tax seems incredible, how do they calculate it?

Its tax on the remaing 75%. Not 75% tax. Thank goodness!

Beginning to sound like I bought yet another pup from a pension seller.

Not really. Pru pensions arent that bad. The have performed at rates above savings accounts and you got tax relief on your contributions which would have been more than the 22% basic rate tax (20% if you wait until next April) and whilst Pru was not the best option, there are plenty worse.