Slightly above the trivial commutation limit

Equinox

My mother is 58 this year. Her (only) pension plan with L&G is worth around £17800.

By the time she is 60 we think her plan will definitely cross the £18000 limit. As she wants to take trivial commutation, is there anything we could do?

kidmugsy

Equinox wrote: »

By the time she is 60 we think her plan will definitely cross the £18000 limit. As she wants to take trivial commutation, is there anything we could do?

If you think it will cross the limit because she is paying in, then stop paying in.

If you think it will definitely cross the limit because of growth in the investments, then look up "definite" in a dictionary.

atush

But at 58 with less than 18K in her pot, can she afford to retire?

tell_it_how_it_is

To be fair atush, that wasn't what was asked or described.

OP, your best initial course of action would be for your mother to call her pension company directly, and discuss what options, if any, she has open to her.

Also have a nosey at http://www.legalandgeneral.com/library/pensions/technical-information/Trivial_Commutation_Rules.pdf

Equinox

@ mugs
She has stopped paying in at 55. As for you're useless second part, very catty. For definite/sure/certain.

@ tell_it_how_it_is
Thanks. For both the answer to atush (she has other plans and adding those in the initial post would have been long-winded and in the end, irrelevant) and the advice to contact L&G. I was just trying to gather options before I go to the "dealer" as you would making any big decisions.

mania112

I see merits in Triviality in this situation.

The best thing to do would be to move the investment into cash.

This will stop growth in its tracks almost certainly, but as it's only £200 off, it still might breach the limit.

A slightly underhanded backup method is to ask an IFA to manage the pension. For this, the IFA will require payment and this can be taken from the fund. Similarly, if at 60 the pension is £18,500, let's say - your mother can transfer the pension and offer to pay the IFA their fee from the pension.

As you know you can't do this until age 60 I presume you're aware of the other rules with triviality, namely:

1) The total of ALL pension (except state) cannot exceed £18k
2) No more contributions can be made to a pension.

jem16

Equinox wrote: »

I was just trying to gather options before I go to the "dealer" as you would making any big decisions.

Probably too early to do anything at the moment as 2 years could see a big difference in many ways. The amount for Trivial Commutation could change and the investments could grow or fall.

atush

Sorry if you thought my reply inappropriate, but as you gave no other details and said this was her 'only' pension then what would she have to live on?

If you dont give a full acct, we have to make the only assumptions we can.

I think if you don't go to cash, this pension will be over triviality.

bigadaj

Alternatively whack it all into high risk sectors, in which case it could be wortha. Fortune or nearly nothing.

Seriously a split between very safe and high risk that may well lose money could allow the value to be manipulated to give a decent chance of achieving your desired value, and there's no definitive date when this needs to be taken only an earliest date.