Private pension

Geoff5

I`ll be 55, next year and am told by legal & General, that I will be able to apply to have all my funds transfered into my building society account but 25% will be taken off my pension. It is a small pot of £40,000 and my only income is 17,000pa. Also because of my financial situation, I can`t afford to get independent financial advice to put my money in the best possible funds in the pension, to gain in some way. Currently, it is going up and down, which is quite disconcerting. Also, is there a way the 25% tax can be lowered because of my low earnings?

kidmugsy

Find out whether there are any penalties for transferring from L&G, and if not transfer to a provider that is more helpful.

As for the £40k: you'll be able to take 25% as tax-free lump sum: that's £10k out, leaving £30k. That latter will be exposed to income tax when you remove it. On an income of £17k p.a. you'll have £26k p.a. available at basic rate tax (20%) so you could efficiently remove up to that £26k in one tax year, leaving the £4k to be removed the next tax year. Average taxation rate over all 3 withdrawals = 15%.

P.S. Why the rush to get it out?

atush

Why do you need your retirement funds now, if you arent retiring? Would just the 25% TF (ie 10K) be enough? What will you do in retirement without this money?

I agree transferring could be a good idea if you cant take 25% and leave the rest. But more importantly 30-40K isnt really enough to retire on. I'd be putting in more.

dunstonh

Also because of my financial situation, I can`t afford to get independent financial advice to put my money in the best possible funds in the pension

Why not? Advice is not that expensive and a move to a modern plan could actually save money rather than cost money.

Currently, it is going up and down, which is quite disconcerting.

They always go up and down. There is no "currently" to it. That is exactly how investments have always been.

Why are you trying to get the money out at 55?

greenglide

To fix his roof? https://forums.moneysavingexpert.com/discussion/comment/70234123#Comment_70234123

JoeCrystal

As for modern scheme, I actually saved money by using an IFA to change to newer scheme compared to a scheme six years ago in term of annual costs. As for paying for his advice, it was taken out of pension fund itself. So that avenue is certainly worth exploring.

xylophone

It might be possible to transfer your L&G pension to the likes of a SIPP with with Hargreaves Lansdown.

You could then just hold the pension in cash which would fix the value until you reached age 55.

You could then choose to take the 25% Pension Commencement Lump Sum which would enable you to repay any loan taken to mend your roof.

The balance of the pension could then be drawn down only as you needed it - you might choose to keep some in cash and invest some in a lower risk fund.

https://www.pensionwise.gov.uk/?gclid=CIX4gYvxn8sCFewW0wodQxMCpQ

The above would be worth a look.

http://www.thepfs.org/yourmoney/find-an-adviser/ You could ring round and ask about fees.

atush

You could get a loan from your mtg lender to fix the roof? I can get 25K w/o a revaluation.

Geoff5

To pay the majority of my mortgage off and also to pay to repair my roof, which because of my annual earnings, I can't get get a credit card or again because of my earnings, it won't go onto my mortgage. The morgage calculator, won't allow for it, however the roof must be done.

Geoff5

Also as an NHS worker, I automatically pay a good sum each month into the NHS pension, so I can't afford to put more savings away.

xylophone

See post 7 above for suggestions?