Pension advice required!

kidmugsy

magpiesnest wrote: »

He is already in receipt of a pension which the grand total of £170 / annum. He will be getting his state pension in January. Does this help at all?

Have you got the prediction of the size that his state pension is going to be? It's possible that the state pension plus his £170 p.a. plus his new £200 or better p.a. will add up to an income that falls within the income tax Personal Allowance, so he won't have to pay income tax. That makes both the small pensions a bit more valuable to him.

magpiesnest

I've spoken to him this morning and he says that the LS 15 years ago was indeed £9500 and he gets £170pa from this. So to clarify, the consensus seems to be that the £1487 is the best LS he can expect and we just need to max out the £200 odd pa. He is not eligible for the triviality? Is that correct?

jem16

magpiesnest wrote: »

I've spoken to him this morning and he says that the LS 15 years ago was indeed £9500 and he gets £170pa from this. So to clarify, the consensus seems to be that the £1487 is the best LS he can expect and we just need to max out the £200 odd pa. He is not eligible for the triviality? Is that correct?

I would ask him if he has any details about the total pot size from 15 years ago as the LS and the yearly pension don't seem to fit together.

atush

And if the pot was 38K as suggested by the LS, then no he will not be eligible for triviality.

magpiesnest

Ok, I will...... To be honest, my mum used to sort all that type of stuff out and she is sadly no longer with us so he may not know. I will ask though. Thanks!

jem16

atush wrote: »

And if the pot was 38K as suggested by the LS, then no he will not be eligible for triviality.

If the pot was £38k and £9,500 was taken as the lump sum that would give an annuity rate of 0.6% - sounds very low.

OP - what age was your father when he took this pension and was there a specific reason for taking it so early?

magpiesnest

He was 50 when he cashed this in, the reason was to pay off the mortgage as they wanted to do that.

jem16

magpiesnest wrote: »

He was 50 when he cashed this in, the reason was to pay off the mortgage as they wanted to do that.

I suppose it could be possible if it was done joint life and increasing in line with RPI. Even then it's still a bit low.

Best to check the pot size if possible though. Trivial commutation does sound unlikely though.

dunstonh

If he commenced his pension prior to April 2006, he would not have been allowed to take the protected rights element of the pension at age 50. That may account for some being left over.

magpiesnest

Ok, I've spoken to him again and he can't find any paperwork regarding this. So I'm left with the only option of the £1487 and maximising the annual income..... What to do with £200 pa..... The possibilities are endless! :-)