Diagnosed with cancer...can I cash pension ?

belcam

I am 55 in August 2015, diagnosed with stage 4 cancer last year...can I cash my small pension which I started years ago and stopped soon after. It has about £7-8000 in the funds?

xylophone

http://www.pensionsandannuities.co.uk/Terminal_Illness_and_Pensions.htm

Contact your provider and ask.

atush

It depends on your prognosis (if they have given you one yet). If they say your LE is 12 months or less then probably yes. But if you decide not to, and you are married, it will go to your spouse tax free.

If you have life insurance that too c an sometimes be claimed early.

belcam

I think I'm too scared to ask if I have less than 12 months...if I don't take it, would my wife be able to get it as a lump sum or would it have to be 25% + monthly pension for life?

kidmugsy

belcam wrote: »

...if I don't take it, would my wife be able to get it as a lump sum or would it have to be 25% + monthly pension for life?

There will be no need for her to take a pension i.e. an annuity. My understanding is that she will get access to all the money tax-free. But you ought to check that you nominated her as the person to benefit in the event of your death.

atush

she will get the entire amount as a lump sum w/o tax. If a DC pension.

But do try to make it easy, make sure you have nominated her to receives the proceeds.

In tidying up last week I have found my OH did not nominate me on one of his, and we have been hitched over 25 years.

jamesd

For anyone who dies before age 75 their whole pension pot is available as a tax free lump sum to their nominated beneficiary. It's helpful to contact the pension firm and tell them that you want to give them a nomination for who should receive the money after your death, whenever that is. You can do that however long you have to live. This will simplify the process for them and help them to pay the money as quickly as possible.

Whether you contact them or not, the money will still be available as a tax free lump sum, so no need to worry about that bit.

There's no age 55 restriction on these payments, they are available at any age, however young. There is no 25% tax free 75% taxed rule either, it's all tax free. This applies whether it's done as a serious ill health lump sum claim before death or if the payment isn't made until after death.

If you instead had a defined benefit pension like final salary or average salary then it would usually be best to contact an IFA about transferring to a personal pension to get the lump sum that way. This is because the personal pension death benefit is usually higher than that from defined benefit pensions. But not always. Some have generous spousal pension provisions. So an IFA's help is desirable to sort out the options then sign off on a transfer out if that is the best route.

belcam

Thank you all for that, so simply a case of informing them who I want nominated. Thanks again.

theGrinch

keep fighting. wishing you all the best

Bazofts_Revenge

I've argued this point for many years but anyone should be able to access their entire pension pot tax no matter how old so long as the monies taken are used to pay for treatment which could save that persons life. Best of luck to the OP.