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Pension quandry

My wife has a very small pension she started in 1987 when self employed with Legal & general for £20 pm. She is no longer self employed.
We are moving to Spain in about 5 weeks time and she is wondering if it is worth carrying on with or just freezing.
Last statement she can find is dated Dec 2005 which reads:

Total basic annuity : £2031.46
Existing Bonuses : £620.16
New 2005 annual bonus : £5.29
Total of basic annuity and all bonuses £2656.91

From what she can remember the 2006 statement was not a lot different (which at £20pm it prob wouldn't be anyway)

She does not want to increase any payments so what would be the best option?

Thanks.

Comments

  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    She won't be able to contribute to it when she becomes non-resident anyway.

    If it is her only pension (apart from state) she can take it all in cash when she turns 60.If her pension total is more than around 16k, different rules apply.She would be able to take 25% of it from aged 50 ( 55 after 2010), the rest providing an income.
    Trying to keep it simple...;)
  • EdInvestor wrote: »
    She won't be able to contribute to it when she becomes non-resident anyway.

    We are keeping the house and renting it out so as we will be paying tax here on the rental income and probably not earning enough in Spain to contribute to their system we will still be classed as residents here (so I understand anyway).
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    If you are living full time in Spain, then you will be deemed resident in Spain.The Revenue here will deem you a "non resident landord" , which means you can join the non resident landlord scheme, so as not to have tax deducted from your rental income.

    This scheme is a great help, as after expenses most NRL's rental income is covered by the personal allowance and thus no tax is payable.But if you're not signed up to the scheme, it's a legal requirement for the tenant or agent to deduct the tax from the rent and send it to the Revenue.
    Trying to keep it simple...;)
  • My description as rental is probably over the top, we are letting a member of the family have the house and they will basically be just looking after it and paying the bills until we have decided whether the move is actually going to work (we have a child with Down's syndrome and want to make sure that the Spanish education system and way of life is going to work for him more than us really), therefore there will be no income from the house as such.
    We will not be registering in Spain as residents for the time being.

    While I am at it .. we have approx £10,500 left on our mortgage .. I can just about afford to pay it off .. would this be a good idea or should I just get it down to a few thousand so the BS keep the deeds for nothing.
    If we pay it off then they also require around £300 for "admin" costs".

    Thanks for your help so far.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    I wouldn't pay it off now. Moving overseas (and coming back) always costs more than you expect, so best to keep a larger cash emergency buffer than you would normally.

    Once you get settled and see how your finances look, overpaying it could be a good move if there are surplus funds.
    Trying to keep it simple...;)
  • EdInvestor wrote: »
    I wouldn't pay it off now. Moving overseas (and coming back) always costs more than you expect, so best to keep a larger cash emergency buffer than you would normally.

    Once you get settled and see how your finances look, overpaying it could be a good move if there are surplus funds.


    Ok, thanks for that ... seems best to leave as is for the time being.

    Back to the pension question though .. saying that if she was still a UK resident .. at the figures shown above is it worth carrying on paying the £20pm or freezing.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    Does the pension have a guaranteed annuity rate attached? What is the rate? Is it a "Retirement annuity Contract" ?
    Trying to keep it simple...;)
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