Cash in an old worthless held pension?

wattoo

I have an old Scottish Widows pension which has dwindled from £600 when I stopped paying into it (in 1995) to £200 now. Ever since I stopped paying the charges each year have reduced the amount. I know it's peanuts but I have been stupid to just leave it there (always wanted to restart payments again but.....you know!). I just can't stand leaving the money to drop to zero so i'm looking at a way of either moving it or cashing it in. I called Scottish widows who said I can't cash it in till I'm 55 - I'm not 40 yet so I asked if i could transfer it to another pension I have, or if i can restart payments. They said I could transfer it, but may not be wise to restart payments as its an old type of pension. If I transfer it I guess a broker would take a fee and so there would be no point moving it. If I leave it I will lose all of it. I am told I can't cash it in, but I have been told by someone who knows a few things about pensions that I may be able to cash it in, less tax.

Has anyone got any idea whether I can cash it in? I'm sure Scottish Widows couldn't be wrong?

EdInvestor

You can only cash it in after the age of 60 if the total value of all your pensions (except state) is 16k or less.

Ask them for some info:

Current value
Transfer value
Fund it is invested in
Other fund choices
Details of any guarantees at maturity
Annual fee charged

Report back these details so we can get an idea of its value.

dunstonh

Scottish Widows have no funds, including their with profits fund, which are not growing enough to cover the charges. One thing Scot Wid did a few years back was start quoting transfer values as the value instead of the current value. So maybe that is the cause of the drop. A visual one rather than a real one.

Scot Widows also were one of the last to have guaranteed annuity rates on new plans. They were doing them until 1995.

but I have been told by someone who knows a few things about pensions that I may be able to cash it in, less tax.

Clearly they don't know as much as they think

I called Scottish widows who said I can't cash it in till I'm 55

I doubt they said that as that is incorrect as well. You will be able to commence benefits at age 55 at the earliest but you cannot do trivial commutation until age 60 at the earliest and as Ed says, all your pension values (company and personal) have to be worth less than 1% of the lifetime allowance (currently 16k).

They said I could transfer it, but may not be wise to restart payments as its an old type of pension. If I transfer it I guess a broker would take a fee and so there would be no point moving it.

Scottish Widows do not employ any advisers at their call centre so are not authorised to say whether it is wise or not to restart it. All they can say is whether you can or not. Any opinion, suggestion or advice would put break their rules. Phone calls are recorded and they have supervisors listening in on random calls. It is unusual to hear any call centre staff member break the rules. Make sure you didn't interpret what was said to be advice when in fact it was factual or an option.

ctba1

hi there, i'm new to this so excuse me.i have a similar experience

i i need advice if poss. i stated a private executive pension with a company in about 1983 paying £300 P.M at the time iwent on to a new company in 1988 and proceeded to take the pension with me.As it was taking time to set up i instructed the company to pay 2 lots of 300pds into the pension as soon as it started up aagin .
a few months later i has 2 statements showing me that i had 2 different plans . one for 600pounds and one for the amount in th e original pension .although i did mention it iwas told it would be sorted out ..as time went by it was more or less forgotten about and each statement(on second pension) came through with less and less on it.it finally was reduced to a nil balance in about 1998Perhaps it was my fault that idid not do anything about it but i've started getting the feeling that the company advisor might well have done a fiddle and got commmissions on opening a different policy ..retrospectively, i think 600 pounnds could we be worth a few thousand if it had been invested correctly .
Have i a case for misselling ,or a justifiable complaint for compensation on this.i have now retired and this would be awfully handy
regards

dunstonh

Executive pension plans are often segmented as a life assurance element(known as death in service) and investment element. Was the second plan the life assurance element? Is it really an Executive pension plan? Perhaps your chunk was but those two payments made by the company went into a retirement annuity contract (the 2x£300=£600 gives the right sort of figure)?

a few months later i has 2 statements showing me that i had 2 different plans . one for 600pounds and one for the amount in th e original pension .although i did mention it iwas told it would be sorted out ..as time went by it was more or less forgotten about and each statement(on second pension) came through with less and less on it.it finally was reduced to a nil balance in about 1998

Perhaps the second segment contained the capital units to pay the charges.

i've started getting the feeling that the company advisor might well have done a fiddle and got commmissions on opening a different policy ..retrospectively

On what grounds do you have to acuse the adviser of fraud?

Commission on pensions back then was not explicitly charged against the contract. It was paid out of the initial charging period and the annual management charge. The adviser couldnt go back later and dip into your pension and take the money.

Have i a case for misselling ,or a justifiable complaint for compensation on this.i have now retired and this would be awfully handy
regards

A mis-sale is if the wrong product is sold and there is no indication of that from what you have typed. You are actually accusing them of fraud but you have not given enough info to suggest anything wrong took place and even if it did, 24 years after the event is going to be hard to prove.

You cant really go around acusing people of fraud in an attempt to get compensation without knowing if a fraud took place or not. What evidence do you have? What types of policy were they (mainly the second one)? What were the charging structures? More information is needed.

ctba1

Thanks for your reply dunstonh .Sorry i was n't actually going down that road acussing the advisor.to explain what i'm trying to say .the whole policy was tranferred to my next employer ..Because of the time lapse in between I asked the new employer to just physiclly transfer the 2 amounts of 300 pounds to the existing policy( so that iwas keeping up to date ,as it were).As both policies were running side by side with the same company,i just thought that something would have been spotted at the time ( like a lot of people i was blaise about pensions at that time so i guess i'll have to swallow).
Iwas a money market broker as well ... mind you i did alright ouit of the main policy. i only contributed for about 8 years and a lot less than 300 pm most of the time .1983-1990 no further contributions .took it out in 2006 at 58 (55 nrd) and had a pot of abt 150000 to play around with so cannot totally complain .
its just a case of looking at all avenues .thks anyway regards

Forgetful

Its all well having a big pension..
but if like my dad u only get a little sum of £40 permonth
then its not worth taking out a pension.
Cos at moment my dad gets the state pension minus the £40pm...
So wots the point in taking a pension out if its gonna be small.

seven-day-weekend

Why do they take off the £40? I didn't think State Pensions were means-tested in that way.

Or have I been living in cloud cuckoo land all this time?

mystic_trev

Juat curious seven-day, but what part of Spain are you in - Andalusia ? I have visions of you living in one of those Cave Homes !

dunstonh

Its all well having a big pension..
but if like my dad u only get a little sum of £40 permonth
then its not worth taking out a pension.

It clearly wasnt a big pension if it only pays £40pm. The fund value would have been less than £15,000 (before lump sum taken) and that is not a big pension. Indeed, its small enough to be considered trivial.

Why do they take off the £40? I didn't think State Pensions were means-tested in that way.

Or have I been living in cloud cuckoo land all this time?

I'm going to guess that he is a low earner and its the pension credit that is being reduced. However, if that is the case, Forgetful has made a bit of an error as it is not a £1:£1 reduction for income over the threshold. That was the case with the old minimum income guarantee but not the pension credit system that replaced it.

seven-day-weekend

mystic_trev wrote: »

Juat curious seven-day, but what part of Spain are you in - Andalusia ? I have visions of you living in one of those Cave Homes !

We are indeed in Andalucia, but not in a cave home (not enough light) - we are in a small traditional village on the side of a mountain on the southern side of the Sierra Nevada mountains. Our house is I suppose what you would call terraced in the UK, but because the land is so steep, all the houses fit together downhill like lego.