Release pension cash

LinBWales

I know I am very lucky in that I have a decent NHS pension that I would like to take in the next couple of years. Some years ago some money was also put into an AVC as a one-off, which is worth about £8,000. The AVC is linked somehow to my NHS Pension, in that it is a scheme for people in the NHS pension scheme.

I am over 55, and would like to access some of this AVC now - my question is whether taking 25% of the AVC as a tax free lump sum now will impact on the nature of the much larger lump sum I will receive from my main NHS pension scheme when I eventually take it? In particular I am concerned that taking some of the tax free sum from the AVC now, will mean that my main pension lump sum will not be tax free when I get around to taking it. Is anyone familiar with how this works please? Thank you

AlanP_2

LinBWales wrote: »

I know I am very lucky in that I have a decent NHS pension that I would like to take in the next couple of years. Some years ago some money was also put into an AVC as a one-off, which is worth about £8,000. The AVC is linked somehow to my NHS Pension, in that it is a scheme for people in the NHS pension scheme.

I am over 55, and would like to access some of this AVC now - my question is whether taking 25% of the AVC as a tax free lump sum now will impact on the nature of the much larger lump sum I will receive from my main NHS pension scheme when I eventually take it? In particular I am concerned that taking some of the tax free sum from the AVC now, will mean that my main pension lump sum will not be tax free when I get around to taking it. Is anyone familiar with how this works please? Thank you

You might get a better response if you start a new Thread specifically for your question, things can get buried in these more generic discussions.

I'm not an NHS pension expert but with my AVC's linked to local gov pension they have to be taken together, or move the AVC out to a private pension pot where you can do what you want.

You could try asking the scheme administrators or, is it covered in the scheme guide?

Srkane27

I have a question if someone could be able to answer?

My mum is currently 65 and recently diagnosed with cancer. She doesn’t get her government pension until she is 66, someone said that she would be able release some of her government pension? Does anyone know if this is true? If so, how do we go about doing this? Thanks

Browntoa

It depends on her long term diagnosis.

https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/ill-health

https://www.thisismoney.co.uk/money/pensions/article-7538347/Im-terminally-ill-60-state-pension-just-lost.html

grnglide

If by "Government Pension" you mean the State Pension then the answer is no. The State Pension is never paid early irrespective of health.


Personal or Occupational Pensional may be paid early depending on the scheme rules.

bar70

Why aren’t the government looking at relaxing pension rules during this crisis? Allowing access to personal pensions before age 55 without tax penalty may be necessary and help many overcome the economic impact. Even if 25% release were allowed or government back loans against pots? At the moment the options on here of finding other means of organising finances are not viable - can’t sell homes, can’t take out loans as credit destroyed and many unemployed. A pension in a few years time is no use if you risk losing everything today. 

cloud_dog

Because that won't help you in retirement and you may just be compounding the problem for the future.

Malthusian

bar70 said:

Why aren’t the government looking at relaxing pension rules during this crisis? Allowing access to personal pensions before age 55 without tax penalty may be necessary and help many overcome the economic impact. Even if 25% release were allowed or government back loans against pots?

Pensions are designed for retirement, not as a rainy day fund for short term emergencies. This is why they are protected from bankruptcy. A lot of people in financial difficulty would be much worse off if pensions could be accessed at any time, because that would mean they could be seized by creditors. They would still be in financial difficulty plus they would lose their retirement fund as well.

Accessing pensions is never necessary. We have a welfare state and national health service, and pensions are not taken into account in assessment for means tested benefits if you are under Pension Credit age.

At the moment the options on here of finding other means of organising finances are not viable - can’t sell homes, can’t take out loans as credit destroyed and many unemployed. A pension in a few years time is no use if you risk losing everything today.

Of course it is. It will be a great deal of use in a few years' time if you haven't spent it all during a temporary crisis with an unprecedented level of government and social support.

Homes can take a long time to sell (especially if you want to avoid a huge discount) even when there isn't a global pandemic so selling your house is never a sensible option for dealing with short term emergencies.

dunstonh

Why aren’t the government looking at relaxing pension rules during this crisis?

No reason they should.

Allowing access to personal pensions before age 55 without tax penalty may be necessary and help many overcome the economic impact.

It just kicks the problem further down the road. It doesn't resolve it.

A pension is not a savings account and it not an emergency fund.   You should have those elsewhere.  And if you haven't then there is the benefits system to fall back on along with the Governement schemes.

Borrowing against your house is still possible at this time.

richytanner

hi, I am currently 62, married and have one property that we rent out, I would like to retire but use my pension pot to buy another property instead of risking it on investments.
is this possible