New Pension Regulations

CEON44

Wonder if anyone can help with a question regarding pensions. Under the new regs you can take all your money, minus tax of course. But this dosnt apply to so called final salary schemes apparently. Is this set in stone? Reason is my wife is pensionable age and has a pot of about 90k. She had a project in mind and wanted to lift all the money. But she was told she had a final salary scheme and could only withdraw maximum 25%. This has scuppered her plans. So is there any way around the final salary scenario? Another thing, she had an update about 5 years ago and the amount was higher than she has now been quoted. Why would this be... bad investing by the pension fund????

macca1974

The transfer value of the pension scheme is calculated by the scheme trustees / actuaries and is based on lots of different criteria. But, it isn't down to the investment performance, it is down to what the trustees feel is a fair value.

It might be possible for you to transfer the money to a SIPP / Personal Pension which would then be able to facilitate a full withdrawal, as long as the final salary scheme in question isn't an unfunded government scheme (where transfers were banned from 6th April). But if you do wish to transfer, you would need to get it signed off by an IFA which will

a) cost you a decent sized fee i'd imagine
b) be unlikely as most of the time it isn't a great idea to transfer out of a Final salary scheme

If you are hell bent on doing it, I would contact a local IFA who has Pension Transfer permissions and expect to pay several thousand pounds to be told its a bad idea. They might then transact it for you, but they might not!

saverbuyer

Why would you even consider attempting to cash in a DB scheme. Madness. You'd be lucky to get £3,000 a year for a 90k annuity at current rates.

CEON44

Thank you Macca, useful information

@ Saverbuyer. Yes I realise that in one way it wouldnt be ideal but as I said my wife had a project in mind. Basically she wanted the cash to buy a property, her old childhood home in fact, which has recently come on the market. Her plan was to buy it, fix it up and rent it for about 5 years then eventually we would move into it from our too large present home, which then would sell and use as a pension. Current value about 275k. She/we werent worried about losing the "pension for life" The route of buying this property was perfect for our own particular situation. But it seems its not to be

saverbuyer

Sorry I really think it would be absolute madness to try and cash a defined benefit scheme in to fund a refurb BTL at 60+.

So many problems with this idea.
Why not sell up now and downsize to the childhood home?