Pension question

Ariadne1

Hi, hope someone can help

DH has a small pension that he took out when he joined a new company 2 years ago. He is being advised to stop work due to ill health. Can he cash the pension in or will it need to be frozen till get reaches 66 in 5 years time.

Many thanks

kidmugsy

If it is a Defined Contribution pension (as distinct from, for instance, a Final Salary pension) then as he's over sixty he most probably can cash it in. What's the value of his fund at the moment? Which firm runs the pension?

There are special provisions for someone likely to die in the next year; I hope he's not so ill that those would apply.

Ariadne1

Hi

It isn't a final salary pension so I suppose it is a defined contribution pension and it us with Scottish Widows. The pension pot is tiny and is just a couple of thousand at the most, maybe closer to 1500.

Fortunately while he is ill it isn't going to be terminal in the near future. He just wanted to know if he could withdraw what was in it rather than leaving it till 66.

I really appreciate your answer, many thanks.

kidmugsy

Ariadne1 wrote: »

.. it is a defined contribution pension and it us with Scottish Widows. The pension pot is tiny and is just a couple of thousand at the most, maybe closer to 1500.

Then he should be able to withdraw it all under the "small pots" rule, its being less than £10k. He gets 25% tax-free and the rest taxed as income.

Scottish Widows are allowed to do this, but as far as I know they are not obliged to do it. If they say they won't then he'll need to transfer to a firm who will do it. In that case I recommend Hargreaves Lansdown, just because I've always found their service excellent and their charges acceptable.