Withdraw my pension contributions - Is it forbidden by law?

dunstonh

I don't think they will pay me back any money in 40 years time.

Why not? That is the point of the pension. it is what pensions do.

If I had known this pension thing was a sort of 40-year long deposit, I wouldn't have put my money in it.

So, when you get to retirement, what are you going to live on? the USS pension scheme is better than any alternative you have access to.

kidmugsy

Arabahn wrote: »

If I had known this pension thing was a sort of 40-year long deposit, I wouldn't have put my money in it.

How could you fail to know? I suppose babies in their prams can't read.

xylophone

Good grief.......

You are a lecturer and don't understand why your pension scheme is such a valuable benefit?:eek:

Southend1

xylophone wrote: »

Good grief.......

You are a lecturer and don't understand why your pension scheme is such a valuable benefit?:eek:

OP is not necessarily a lecturer. Some Universities enrol all staff into USS. I am a member of clerical staff (not on a management grade) and am a USS member. She could be in any role.

PensionTech

Arabahn, I'm sorry that you find yourself in this position. Although it's surprising that you didn't make the connection between "pension" and "retirement", these misunderstandings do occur, and there's no call to mock you for it. However, we should be clear that the USS is not at fault here; they would have provided you with information about the pension scheme when they signed you up (at which point you could have opted out), and it's generally common knowledge that money invested in a pension stays locked up until you reach retirement age. So don't blame USS - it's just unfortunate that you didn't understand what you were getting yourself into.

That said, it's probably one of the best mistakes you'll ever have made. The USS is a defined benefit scheme, which gives you a guaranteed (bar the entire failure of the scheme and all of the employers that use it) income for the whole of your retirement, which will almost certainly be worth a huge amount more than you've paid into it. If you die early, your beneficiaries will get some of that money. You don't have to face longevity or investment risk. You've saved money on tax and probably NI, and you've been given free money by your employer. None of these things would have happened if you hadn't joined the pension scheme. Even if you decide to transfer into a defined contribution scheme at some point (which is generally not a good idea, as it means you have to take on your own investment and longevity risk), you still get the benefit of all that extra money that you didn't contribute. What a great scheme!

I don't even manage to get them to send me my pension statements now

What pension statements are you expecting to get? As a member with a preserved benefit (i.e. one who has accrued benefits but is no longer contributing), they aren't obliged to automatically send you annual updates or anything of the sort regarding your pension - the only thing you need to know about it is the amount given on the statement when you left the scheme, showing the pension that you'll be given in retirement, and the knowledge that this figure will increase in line with inflation in the meantime. You can ask them for updates in the meantime, and they'll give them to you, but be aware that most pension companies do have a turnaround time of a couple of weeks or more for that kind of information - it's not just a case of logging into a system and printing out a figure.

I don't think they will pay me back any money in 40 years time.

Based on what? There's all sorts of legislation protecting your right to that pension, and even if the worst happens and the USS collapses entirely (unlikely), there's a "lifeboat fund" that makes sure you get most of your pension in retirement. And if you ever started to get really worried about that, you could transfer your benefits to a separate fund where you didn't have to worry about that kind of risk. Of course you'd then have to worry about investment risk etc. as stated above, which is why this generally isn't recommended.

I may need the money over the next year.

If you were relying on having this money back and thought it was some kind of short-term savings scheme, then you really should have done some basic fact-checking first - there's no defence there I'm afraid. But there's lots of other ways to get money, and MSE is really good at helping you to find them - making lifestyle savings, loans, and all sorts.

I’m in my 20s!

So am I, and I've been saving into a pension (voluntarily, and on far worse terms than USS offers) ever since I started working, as well as making sure I have enough set aside for short-term needs such as whatever is coming up for you next year. Pensions are important - we're talking about how your lifestyle is going to be funded for 20-30 years, or more. You wouldn't be flippant about your salary for that period, so you should afford your pension provision the same kind of attention. Don't rely on being able to live on the state pension; don't rely on property, or inheritance. You need to make sure that you are preparing for what is likely to be a very long life, and the responsibility of funding it is down to you. This is the perfect time to start a pension, and this is when you're meant to start saving into a pension; the earlier you save, the less you'll need to put aside each year (just see all the people who start threads on here panicking because they're 40 or 50 and have no pension savings), and the more you'll benefit from all those lovely tax reliefs that are afforded to pension savings.

I'm sorry if this was a rude wake-up call but I hope that it's been informative.

Best of luck

dunstonh

I’m in my 20s!

I was too once. And it feels like yesterday. I also thank my 20 year self for paying into a pension as that money put aside then means I feel a lot more comfortable now and will be in 20 or so years time (and for the rest of my life) when I come to draw on it.

You are not 20 forever.

xylophone

Although it's surprising that you didn't make the connection between "pension" and "retirement"

Surprising??? Oh, come on!

And while it appears that the OP could be in any job from filing clerk to professor, is it really likely that anybody who can read doesn't realise that other than in exceptional circumstances, a pension is retirement provision?

jem16

PensionTech wrote: »

What pension statements are you expecting to get? As a member with a preserved benefit (i.e. one who has accrued benefits but is no longer contributing), they aren't obliged to automatically send you annual updates or anything of the sort regarding your pension

The OP doesn't mention anything about being a deferred member.

atush

Arabahn wrote: »

I may need the money over the next year.

I don't even manage to get them to send me my pension statements now, I don't think they will pay me back any money in 40 years time. If I had known this pension thing was a sort of 40-year long deposit, I wouldn't have put my money in it. Thanks to all for your contributions (to the forum) ;-)

If you need money, you are spending too much. Cut back.

As for your pension, it is a DB pension or 'final salary type' and one of the best pensions going. Which will give you an income or life when you retire. 2 years wont get you a huge amt of money, but it is a start. Esp as it sounds to me you are money foolish so may not start another.

Lets look at the facts.

DB pension over 2 years, so Cant get your money back. Period. All the ranting you do now counts for nothing. The pension is a promise to pay you an income for life based on your salary when you either leave or retire. Which is expensive to pay for, and which will cost you very little.


IF it was going for less than 2 years, you'd get only pence int he pound for what it is worth.

Say the transfer value of this pot of money was 1000 pounds. and your employer put in 700. Of your 300, you would get only around 200 back after tax and NI. Which means you gave up something worth 1000 for just 200.

Which sounds kinda stupid- doesn't it?

EdSwippet

xylophone wrote: »

And while it appears that the OP could be in any job from filing clerk to professor, is it really likely that anybody who can read doesn't realise that other than in exceptional circumstances, a pension is retirement provision?

One possibility -- OP might be here temporarily but from another country, where 'pensions' are more fluid than in the UK, and can be readily collapsed if needed.

Canada allows RRSP withdrawals before you retire, albeit with penalties in the form of higher taxes. The US allows 401k/IRA plans to be withdrawn, again with some tax penalties. Swiss 3rd pillar schemes can be withdrawn on 'repatriating' out of Switzerland. And temporary residents of Australia can access Australian super benefits when they leave Australia. And that's just the four I thought to check.

It could be that the UK is exceptional in never allowing early pension withdrawals, even for temporary visiting workers. Blaming the (potential) victim here seems harsh without knowing the full situation.