What to do with old Allied Dunbar (now Zurich) Plans?

foreversummer

He was hoping to take small amounts from it to top up his state pension and keep him under the income tax threshold. So am I right in thinking the choice is pay tax on the 75% or pay the large transfer charge to transfer it to another scheme? I'm guessing there ain't a lot of difference in it monetary wise.

I found some talk on the net of pressure being put on the pension companies to let everyone use their pensions like a bank account. I think uffplus is what they call it. Do you think it is likely to change anytime soon? We will leave the pension where it is for the time being. Sorry if I'm using the wrong terminology - just trying to understand. An Allied Dunbar rep in 1992 advised him to come out of the Post Office Final Pension Scheme. By the time we realised that this was bad advice the PO had a rule of not allowing anyone back in.

Foreversummer

dunstonh

He was hoping to take small amounts from it to top up his state pension and keep him under the income tax threshold. So am I right in thinking the choice is pay tax on the 75% or pay the large transfer charge to transfer it to another scheme? I'm guessing there ain't a lot of difference in it monetary wise.

putting it in a drawdown plan may make more sense and be more cost effective in the long run if the aim is to draw it out in bits over a long period. Certainly more tax efficient than doing it in one go.

I found some talk on the net of pressure being put on the pension companies to let everyone use their pensions like a bank account.

There is no such pressure. That was an ill considered off the cuff remark that was made a year ago and has been backtracked since.

greenglide

An Allied Dunbar rep in 1992 advised him to come out of the Post Office Final Pension Scheme. By the time we realised that this was bad advice the PO had a rule of not allowing anyone back in.

So you were recompensed for what was obviously bad advice? You should have been contacted about this many reasons ago and you should have been recompensed and put back in an equivalent position?

I think it is too late now though.

mgdavid

Zanderman wrote: »

Thanks to all for the advice and for taking the trouble to respond today.

I should perhaps stress that I am not seeking advice on my pension situation overall.

I posted today simply to ask advice on those three old Allied Dunbar plans - which I feel I should take some decisions on - perhaps keep them asis, transfer them or resume some payments.

Those three plans are not critical to my overall retirement situation, so my posting isn't linked to my overall retirement situation.

I am planning to get some formal advice on these plans, and on some additional pension provision in general. In the meantime any additional comments about those plans would be very useful!

Sorry to be harsh but this sounds like muddled thinking to me - the AD pensions are pensions and form part of your pension provision. Therefore it makes no sense to view them in isolation.
If they mean that little to you then leave them until you can access them at age 55 and donate them to charity.

AnotherJoe

I agree with mgdavid, unless the amount is so trivial you can discard it, your whole position needs to be taken into account.

Zanderman

mgdavid wrote: »

Sorry to be harsh but this sounds like muddled thinking to me - the AD pensions are pensions and form part of your pension provision. Therefore it makes no sense to view them in isolation.
If they mean that little to you then leave them until you can access them at age 55 and donate them to charity.

AnotherJoe wrote: »

I agree with mgdavid, unless the amount is so trivial you can discard it, your whole position needs to be taken into account.

I have no idea why can't you just take my statement for what it is. I have, and am confident that I have, a sufficient pension from other sources.

My question about my old allied dunbar policies is simply about those policies - and how I might make the best of them as a supplement to my retirement income. The rest of my pension is simply not relevant.

I had hoped for some tangible advice on the AD policies. But actually I've had one person say transfer and another saying maybe I shouldn't transfer.

And, unbelievably (from one who hasn't read the thread - or at least hasn't clocked that I am 55), suggesting I donate to charity. This for a fund worth about £2k pa depending on how I access it.

So I'm no further forward - and regretting starting the thread! The initial responses from AnotherJoe and dunstonh were helpful (though contradictory) so I'm grateful for those.

mgdavid

Zanderman wrote: »

......... I know (and understand) very little about pensions ...........

Zanderman wrote: »

.........Re workplace pension I'm seeing that as entirely separate at present - that would just about suffice by itself. ...........

These comments plus your replies to questions give rise to my concern. Guidance cannot be given until we know your objective. Go see that IFA!

Zanderman

mgdavid wrote: »

These comments plus your replies to questions give rise to my concern. Guidance cannot be given until we know your objective. Go see that IFA!

My objective, in the case of the AD policies, is for some views on options for those policies.

I have acknowledged the value of an IFA for wider advice, which will encompass those policies..

I am not asking, in this thread or indeed anywhere on MSE, for advice on my overall pension. Just for thoughts on the AD policies. Nothing definitive - just opinions on those AD policies.

You obviously don't feel you can contribute without wider knowledge of my finances - which is the sort of view I'd expect in a proper chat with a financial advisor. This isn't that chat though.

Perhaps I should just stop posting on here, as this thread seems to be winding me, and others up a little!

dunstonh

My objective, in the case of the AD policies, is for some views on options for those policies.

The problem is that nobody has access to the plan details. We dont know what version you have or the terms it was sold under. There is not just one version of the plan.

We know that some AD plans are good value when made paid up (but bad value when contributing to them). We dont know if yours is one of those. Also, some posters here will not be aware of the quirks and issues around AD plans. So, they may take a guess without knowing this. Plus, this is the internet. So, anything and everything could be wrong.

I think the comments by mgdavid are fair. Indeed, I have given myself a virtual slap for not spotting that myself.

The days of treating plans in isolation of other plans are long gone. These things need to be looked at collectively in line with your objectives. At £2k p.a. from the AD plans, that could nicely swing your retirement plans from "just about suffice" to being comfortable with the scope for enhanced lifestyle spending.

So, don't take the comments negatively. Discussion boards are for discussion. Whilst you may not value the comments, others reading may do. Plus, there was the chance that you were not aware of an issue or were looking at it is a different way and someone pointing it out could have changed your view positively.

mgdavid

Zanderman wrote: »

My objective, in the case of the AD policies, is for some views on options for those policies.
........!

You're still missing the point.
Value is £54000.
When and how do you want to use this?
When do you want to stop working?
When is your other pension eligible for payment?
When is your SP age?
Do you have other savings?
Do you have other debt? (eg mortgage).
Do you want to keep this 54k as available capital to cover big ticket item expenditure in retirement, or tie it up in order to provide extra annual income?
Had you thought about retiring a bit earlier and using this to bridge the gap until other pensions are payable?
etc
etc

You are obviously aware of what's possible from the options you gave in your previous posts;
what best to do with the AD pensions will depend on the answers to the above, plus understanding exactly the terms, costs and growth possibilities of the current policies.