We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

Under 55yrs pension fund less 18K early cash in?

smartie50
smartie50 Posts: 9 Forumite
I have a pension with Equitable Life (ha-ha!) They have sent me, on my request, a statement representing my with-profits adjusted financial amount. This is £15.5k. I started this policy in my early 20's and stopped when things went wrong at EQ. Due to my family circumstances, this would be of benefit now. What would be my tax rate on £15.5K? Anyone's advice pls.
Many thanks.

Comments

  • molerat
    molerat Posts: 33,574 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 10 November 2013 pm30 3:29PM
    55% as it will be an unauthorised transaction but EL will not allow it anyway. You can only access the full amount if you are over 60 and all of your pension pots are less than £18K. You will be able to take 25% tax free at 55 though. There are illegal ways of accessing the whole amount but with the cut the scammers take plus the 55% tax on the whole amount you won't have enough left to buy a pint.
  • :beer: Thanks for confirming my already dreaded thoughts. Just one more thing if you're still awake! Does my with-profits fund of £15.5K increase/decrease over the next 8yrs if I am not allowed to access this until I'm 55?
  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    It should increase, but you could also transfer it out to another pension and invest in equities instead if you don't like the idea of WP.
  • woolly_wombat
    woolly_wombat Posts: 839 Forumite
    Part of the Furniture 500 Posts Name Dropper
    edited 13 November 2013 pm30 2:28PM
    smartie50 wrote: »
    :beer: Thanks for confirming my already dreaded thoughts. Just one more thing if you're still awake! Does my with-profits fund of £15.5K increase/decrease over the next 8yrs if I am not allowed to access this until I'm 55?

    You will need to check your policy details to find your contract end date (typically at age 60). Also look for a guaranteed investment return (GIR), typically 3.5% pa, which is only payable at the contract end date.

    If you decide to transfer out early then the GIR will not apply, and Equitable Life will apply a 'financial adjustment' i.e. a reduction.

    See:
    https://group.equitable.co.uk/etg/elas/groupmarket.nsf/web+pages/pdflib/$file/InvestFunds05.08.pdf

    WW
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.4K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 241K Work, Benefits & Business
  • 617.3K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.