Help please regarding pension payout

mavon

My husband is 2 years into an IVA.Yesterday's news on pension annuities has got us thinking .He is 65 next year and will be due a pension which has been held in a freedom bond for many years.The pension pot is guarenteed to be £13,000.If he was allowed to take all the pot out instead of buying an annuity would this be classed as a windfall as far as the IVA is concerned ? Would it be wise to try and ask a family member to help us make an offer to end the IVA early so that we could keep the pension money.We are really struggling and the house is in dire need of many repairs that we cannot afford.We even have 30 0dd year old aluminium framed single glazed windows and cannot do anything about it.This money would help us put our house in some sort of order.Any advice would be appreciated.

mavon

But what if we could make an offer for full and final payment now? The pension isn't due for payout until April 2015

mavon

what would you suggest he offer?He is paying £120 per month and has another 3 years left

McKneff

If he is not going to buy an annuity, what will you live on.


State pension is not a lot thesedays.

mavon

We are living on very little now,my state pension and his tiny private pension (£27 per month plus a pension that pays out yearly (£200) plus
pension credit so by finalising the IVA we will be better off by £120 per month.We also manage to pay a mortgage out of this small amount
which still has several years to run .I was thinking along the lines of £3000 myself

mavon

Thanks for your input ,i do appreciate it

matelodave

Be very wary of what you might get as a pension payout - you are usually only allowed to take 25% of it tax free and the rest would be taxed.
You probably won't see all of the 13k that you were hoping for because the taxman will take a lump of 20% or more if you want it as cash - even that nice Mr Osborne isn't that generous

longtermplanner

if you are getting Pension Credit, are you getting Support for Mortgage Interest? see https://www.gov.uk/support-for-mortgage-interest/what-youll-get

if you are struggling on £120 a month and a relative could help you out, then you may be able to get them to accept an offer of £3k to settle your IVA now.