Pension pot - getting the ball rolling

Grouchy

I have had a scout around to find an answer and haven't so hope this has not been asked many times before.

Is it up to me to contact the pension schemes I belong to to ask about options for cashing in my pensions under the new rules or will they contact me (and everyone else on their lists)?

I understand that some pension types are eligible for cashing in and others not, as I understand it the final salary type ones are not. Is this a universal rule or and there rules also that individual pension companies can make in addition to this as to what each persion is and isn't allowed to do with their 'pot'.

Thanks

SALTY69

I have a really small pension which i receive a month £26 lol the pot is about £10000 what do you all think? possible to cash in or not?

PeacefulWaters

It's up to you.

The pension company doesn't know at what stage between 55-75 you'll want to act.

david78

They are not going to contact you. You need to contact them. Be prepared that some providers won't offer the new freedoms yet.

dunstonh

Is it up to me to contact the pension schemes I belong to to ask about options for cashing in my pensions under the new rules or will they contact me (and everyone else on their lists)?

The providers will contact you about 6 months before your indicated retirement age on the plan. The indicated age is just for illustration purposes. You are not held to that age apart from a few certain types of pension.

I understand that some pension types are eligible for cashing in and others not,

All money purchase types are. However, there can be consequences of such action and some providers may not offer the options you want.

have a really small pension which i receive a month £26 lol the pot is about £10000 what do you all think? possible to cash in or not?

How you word it would suggest you have income drawdown as that is the only option where the pension fund still retains a fund value. However, if you bought an annuity, then you no longer have a fund value and that is cast in stone for life. There is the possibilty of being able to sell an annuity in future years but the terms are unlikely to be attractive for most and it is dependent on a Conservative Govt from May.

atush

What makes you think cashing in your pensions is a good idea?

Are you still working and paying tax? Are you prepared to pay 20-40% income tax on your pension if you cash it in?

Grouchy

Thanks for the replies. I didn't want to go sending off letters etc if as part of the rules the companies were obliged to contact everyone who could have immediate options open to them. Would be a duplication of effort.

I am going to contact them individually to ask about my options.

atush - I have done my homework and am intending to cash in ones that are smaller (under 10k and give a only piddling annual income I would be lucky to recover the sum I have contributed) and keep ones going that give a decent annual income, I also have other resources. I am early retired. So plan to cash them in to ensure tax free within my tax allowance. I'll revisit and review my situation once I have answers from my pension plans and know exactly where I stand.

Thanks again

dunstonh

I am going to contact them individually to ask about my options.

Be aware that the providers are under no obligation to offer all the options on the market place. They may offer a few or just the basic ones. This isnt a problem as you can transfer around but it is something you need to be aware of.

I have done my homework and am intending to cash in ones that are smaller (under 10k and give a only piddling annual income I would be lucky to recover the sum I have contributed)

Why not consolidate them ?

hyubh

Grouchy wrote: »

I have done my homework and am intending to cash in ones that are smaller (under 10k and give a only piddling annual income I would be lucky to recover the sum I have contributed) and keep ones going that give a decent annual income, I also have other resources. I am early retired.

If by that you mean you are looking to sell annuities already bought, well that is merely a proposal at present. What has been introduced today is a removal of a need to buy an annuity in the first place for less wealthy people (the requirement had already been removed for wealthier people a few years back).

atush

atush - I have done my homework and am intending to cash in ones that are smaller (under 10k and give a only piddling annual income I would be lucky to recover the sum I have contributed) and keep ones going that give a decent annual income, I also have other resources. I am early retired. So plan to cash them in to ensure tax free within my tax allowance. I'll revisit and review my situation once I have answers from my pension plans and know exactly where I stand.

This doesn't make a lot of sense to me, esp the piddling income bit. Your pensions need looking at in a whole as to provide income. So it would be the income off the total in DD if not buying an annuity.

But, if you were to take all of some of the pots tax free using your allowance and pit them in S&S isas- fine as they will provide tax free income in future. But the same funds can be used to provide income inside and out of pensions.

Grouchy

hyubh wrote: »

If by that you mean you are looking to sell annuities already bought, well that is merely a proposal at present. What has been introduced today is a removal of a need to buy an annuity in the first place for less wealthy people (the requirement had already been removed for wealthier people a few years back).

Forgive me if I don't understand the point you are trying to make - I am not totally savvy at these things.

What I have at present are pension statements from various pension companies related to jobs I have had in the past that will provide an annual income from age 6x with slight variations. I've not bought any annuities and am under 60. They give a total value and then an estimated annual income on retirement. Couple of these are small, under 5k in total value. Others are worth a decent annual income, which I will not touch or drawdown. The former are the ones I am planning on cashing in if I have that option as the annual projected income is piffling (even totalled up). I would look to invest the money elsewhere, atush gives a thought to ISAs, which may be a possibility.
I hope I have understood and answered to clarify.

The ISA option is a good one to think of with any cash pot I may get.

The consolidation one is something to think on.

Thanks for all the options and replies.