Protected rights

daveb45_2

I have a pension with Scottish Life which was closed some years ago it has a total of £17000 in it with £14000 of these as protected rights as I am now 55 can I take all of this as a lump sum?

xylophone

Protected rights are no more so that you just have ordinary pension benefits in the policy?

Presumably you can take 25% tax free with the balance taxable as income in the year of receipt.

Have you contacted Scottish Life (Royal London)?

http://www.royallondon.com/contact/

jamesd

Protected rights protected government desire to have you buy an inflation-linked annuity with spousal pension. The protections were abolished a few years ago and these are now just normal pension pots.

Of the £17,000 you would get £4,250 as a tax free lump sum. If you take a penny more than that you will have your pension money purchase annual allowance reduced from £40k to £10k for life. The money will be added to your taxable income for the year to calculate the tax due but the pension firm will charge you tax initially as though you would be getting the same income each month for a whole year. You can reclaim the extra tax from HMRC.

If you want to take the tax free lump sum without having your money purchase annual allowance reduced you can put the remaining 75% into flexi-access drawdown and not take any of it until you're happy to accept the restriction.

xylophone

The protections wee abolished a few years ago and these are now just normal pension pots.

If you take a penny more than that you will have your pension money purchase annual allowance reduced from £40k to £10k for life.

More here.


http://www.metlife.co.uk/uk/Documents/Technical_Library/1677-Pensions_flexibility_from_6_April_2015-Technical_guide.pdf

kidmugsy

Sir, 'tis manifestly imprudent to refer to a penny and "wee" in close conjunction.

xylophone

Not to mention a pot!:)

jamesd

I think that use of a pot would be highly desirable.