Help with pensions

sheilavw

Hi
Apolgies, useless with anything like this. My Husband paid into a private pension for about 12 years late 70s and 80s. He is 56 this year and working 5 nights as HGV driver. He is struggling with a couple of health issues and is hoping to reduce his nights to 3. The last 20 odd years he has paid into separate pension by standing order. (Ee wants to leave this in place). He is hoping to take his frozen pension, is this allowed now? or can you only have it if you give up work completely on health grounds? Any info would be appreciated

molerat

Pensions are generally accessible at 55. He obviously needs advice on what is best for him. Post a few more details of the pension on here and someone will give him some pointers.

xylophone

A "private, frozen pension".

I wonder do you mean a deferred defined benefits occupational pension scheme?

Or maybe an old Retirement Annuity Contract? (S226 policy).

Or another type of occupational scheme where he did not have to transfer out on leaving?

sheilavw

Thanks. He doesn't get regular communication from them. Last was 2012 after we asked for a statement. It was worth £4449.93 per annum. According to a previous letter in 2006 it increases by a fixed 7.5% a year. What he wants is to reduce his shifts and take a monthly amount whilst leaving his other pension going.

torbrex

I converted my 3 pension funds into a single SIPP and I take a fixed monthly income from that at age 55 so I would imagine something similar would suit.
You have quoted an annual return, I assume that would be an annuity quote, what is the total fund worth?

xylophone

fixed 7.5% a year.

This sounds like fixed rate revaluation on a GMP.

This indicates a Contracted Out Salary Related Scheme - see https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

Can you say for which company he was working at this period in his life?

xylophone

Incidentally, as your husband is over 55, he may wish to obtain a new state pension statement.

https://www.gov.uk/state-pension-statement

jem16

sheilavw wrote: »

Thanks. He doesn't get regular communication from them. Last was 2012 after we asked for a statement. It was worth £4449.93 per annum. According to a previous letter in 2006 it increases by a fixed 7.5% a year.

As xylophone has stated, this sounds like a deferred Defined Benefit scheme ( can also be known as final salary scheme). The scheme retirement age is important here as any access before that age would see an actuarial reduction if taken before that age. The reduction could be around 5%pa so if the scheme age is 60 then taking it at age 56 could see a reduction of around 20%.

What kind of pension is the other pension that he's been paying into for the last 20 years? If it's Defined Contribution it may be better to use that.

jamesd

As others have written, this looks like a defined benefit scheme so he needs to find out when the normal retirement age is and what it'll cost him in reduced income for taking it early. usually it's better to borrow money at low rates like on a mortgage rather than taking pensions like this early.

Please say more about the one he's paying into by standing order. It'd probably be far, far better to take some money from that until the other one gets to normal retirement age.

sheilavw

Thanks for replies. Jem16 is other pension is just what he pays standing order to Phoenix (formerly Brittanic) paid it over 20 years.
The company he worked for was .AIT which was formerly Lucas.

Most recent letter Oct 2012 (we sent enquiry because he heard nothing from 1989 when he left until 2006 when a company was trying to trace him), so we asked for update
It says we have pleasure in informing you that the current level of your deferred benefits are as follows
A pension of 4449.33 per annum (2006 letter said part of your deffered pension which represents guaranteed minimum pension will be increased by a fixed rate of 7.5% a yr, remainder of your deferred pension will increase each year in line with the retail price index, subject to a maximum of 5%.

The 2012 letter then goes on to say normal retirement date 1/10/24. The earliest age at which you may be able to take early retirement benefit is 55. I assume you have to get GP letter saying beneficial to your health etc. ?
Thanks again

jem16

sheilavw wrote: »

Thanks for replies. Jem16 is other pension is just what he pays standing order to Phoenix (formerly Brittanic) paid it over 20 years.

Assuming you mean Phoenix Life? Is it a Defined Contribution scheme with an actual pot of money and invested into funds? In other words I assume he didn't work for Phoenix.

A pension of 4449.33 per annum (2006 letter said part of your deffered pension which represents guaranteed minimum pension will be increased by a fixed rate of 7.5% a yr, remainder of your deferred pension will increase each year in line with the retail price index, subject to a maximum of 5%.

The 2012 letter then goes on to say normal retirement date 1/10/24.

So the normal retirement age is 65. The above are his benefits at 2012 and will not take into account taking his pension 9 years early where it is likely that he would lose around 45%.

You would need to ask what his benefits would be if he took them now at age 56.

However probably best to take the Phoenix pension.

The earliest age at which you may be able to take early retirement benefit is 55.

Yes but with an actuarial reduction.

I assume you have to get GP letter saying beneficial to your health etc. ?
Thanks again

He's unlikely to qualify for any ill-health pension if he is still able to work.