Nice pension surprise

bobblebob

Mum used to work at Woolworths about 30 years ago, and apparently was in the pension although she cant ever remember joining it. Anyway few months back she got a letter from a company called Kingfisher who were asking some details in regards to a pension she has with them. She rang them and said you must have the wrong person as i never had a pension with Kingfisher, but they were adamant they had the right person as they had her NI number

Anyway she sent some details off and they said they would be in touch. Turns out Kingfisher took over the pension pot of Woolworths years ago, and she got a letter yesterday saying she is entitled to a 21,500k pension (before tax) :eek:

She can have it either as a lump sum or £800 per year. Seeing as it would take 25 years or so to get to the 21k, a lump sum seems the sensible option. Not bad to say you didnt know you had one

Muscle750

Makes you wonder what happens to the money if they can't trace people

ViolaLass

Has she checked whether she would lose any of that lump sum to tax/other charges?

bobblebob

Yea that is before tax, but both the lump sum and yearly amount are both taxable

whitesatin

Yes, a lovely surprise, one we would all like to have.

Years ago I worked for Glasgow council then did a spate at Harrow council but, I am pretty sure that when I left, I "lifted" my superannuation bringing any future pension prospects to an end. I do regret that a bit but I needed the money at that time and I was only in my early twenties. I did go on to train and work as a teacher so at least I got my act together eventually.

I often wonder if I hadn't taken my contributions, would I have been in receipt of an extra pension today.

If ifs and ands were pots and pans..................as my mother used to say.

Your_Hero

Don't forgot if you take it as a lump sum, 25% is tax free. The remainder is then taxed as earned income. Depending if your mother has any other income for the year, then she can then offset this against her Personal allowance. The effect would be a larger amount without tax.

bobblebob

Cheers didnt know that. She doesnt work now

dunstonh

30 years ago, Woolworths operated a final salary scheme. So, whilst £800 a year in year one may not be much, with indexation, it could be better to take it annually rather than in a lump sum.

If she has any benefits that are means tested then taking it as a lump sum would see her income go up in the year she takes it and the benefits removed for that year.

xylophone

If she takes the lump sum, the company will deduct tax of 20% on the 75%?

If, as you indicate, she has no income to use against her personal tax allowance, she would need to contact HMRC with regard to a refund?

atush

If this is a final salary scheme, and she is of good normal health, it would take less than 21 years to get her dosh and she will most likely live l.onger than that. Id consider keeping it as is, or if taking it, have her defer her state pension for a ear or two.

kidmugsy

atush wrote: »

Id consider ... taking it, have her defer her state pension for a ear or two.

Good point: she'd be in pocket handsomely if she took the lot and used it to fund deferring her State Retirement Pension for two or three years.