'new pension freedom'

Your_Hero

JennyF wrote: »

I'll check if it has a "GAR". what I understand is there is a 'fund value' and a 'transfer value'. the fund value is payable at 60, but prior to 60 one would take the transfer value, whether you take it early OR transfer it elsewhere.

It sounds like you are referring to a guaranteed fund value. It's not a penalty as such but rather it's because you simply aren't aged 60 yet. The guaranteed fund value kicks in at age 60 (if it is one). You are entitled to the transfer value of it currently.

To see if there really is a penalty or not, find out what the current fund value is now (not at age 60), and compare with the transfer value.

SomeUser

What's the rate? Does it say?

JennyF

I'm not sure what you mean by 'rate'? sorry, not up on this stuff. the funds are called 'managed (a) pension accumulator series 03', if that makes any sense to you!

Your_Hero

JennyF wrote: »

having just scanned the documents it seems there is a guaranteed annuity rate, but only for 5 years.

That isn't a GAR. That's the guaranteed annuity period if you died within 5 years it will continue payment until end of the period, e.g. 5 years. This comes at a cost if you choose this option for the annuity.

JennyF

Your_Hero wrote: »

That isn't a GAR. That's the guaranteed annuity period if you died within 5 years it will continue payment until end of the period, e.g. 5 years. This comes at a cost if you choose this option for the annuity.

oh I see. not sure about a GAR then - I can't see anything that suggests that to be the case. looking at the original documents they seem to be referred to as 'perpetual pension funds series 3', if that tells you anything...

JennyF

thank you again for all your splendid advice! I've just seen the time - 1:30AM! must get shut-eye, but I will check back tomorrow to see if there are any further comments.

noh

The Windsor Life Managed accumulator series 03 fund referred to, by the OP in post #34, is a unit linked fund the price of which is published here:-
https://www.reassure.co.uk/other-enquirers/Funds/Unit-Linked-Funds/Pages/Windsor-Life-Unit-Linked-Funds.aspx

atush

JennyF wrote: »

also are there any tax disadvantages to doing it this way? assuming it's the same; first 25% tax-free, remaining 75% taxed at basic rate, after applying tax allowance? I would really love to help my daughter with a deposit on a flat, and this would solve so many problems for us.

Are you really sure you want to use your pension money in this way? Money that is meant to be used in retirement? Do you have other pensions?

As far as tax, it is always best to take a pension when you have no other income, that way you use your PA to receive 10.5K tax free. So add your income for next year to the 75%- will it take you into HRT? In which case you'll lose 40% of it? If under, you will pay BRT on the whole 75%.

JennyF

atush wrote: »

Are you really sure you want to use your pension money in this way? Money that is meant to be used in retirement? Do you have other pensions?

As far as tax, it is always best to take a pension when you have no other income, that way you use your PA to receive 10.5K tax free. So add your income for next year to the 75%- will it take you into HRT? In which case you'll lose 40% of it? If under, you will pay BRT on the whole 75%.

the pension will only pay out around £2,500 a year, maybe £3,000, so it's sort of negligible to me. I won't in be the upper tax bracket as I don't have an income at the moment, which is one of the reasons why it seems a tax efficient decision right now. I have quite a bit of equity in the family home, which I will most likely sell by then; just seems an excellent way of helping out my daughter right now.

JennyF

thanks noh - can you tell me what that might mean to me, in my situation? much obliged.