What to do with a very small pension

rorysdad

Hi all,

I have been informed that I have a 'pension' worth £1,200!

It is related to a company I worked for back in the late 1980's. They went bust a few years back. I left there in 1992.

Thing is everytime I get a statement the value is REDUCING. I called the company that hold the money and they said that was because I am not paying into it and there are charges been taken from it.

So, what do I do - see it continue to dwindle or move it or what?

They did say that when I reach 55 end of this year I may be able to take the whole sum (rather than just the 25% tax free).

Is that true and how do I get hold of it.

I am thinking of just moving it now to Hargreaves Lansdown as I believe if it is held with them in a SIPP in cash there will be no charges?

RD

dunstonh

I am thinking of just moving it now to Hargreaves Lansdown as I believe if it is held with them in a SIPP in cash there will be no charges?

There will likely be charges on transfer as the only reason a fund would be going down consistently is if it has units that were there for the payment of the initial commission. This means that transfer out will likely see a penalty applied. So, you should check that.

Holding it in cash to avoid charges is daft if it is going to be there long term. One assumes this is not your only pension. So, why not consolidate that your other?

rorysdad

But, it is consistently going down in value...and yes I do have another much larger pension - and that is consistently going up in value.

I can't fathom it all.

RD

dunstonh

rorysdad wrote: »

But, it is consistently going down in value...and yes I do have another much larger pension - and that is consistently going up in value.

I can't fathom it all.

RD

You need to fathom it if you want to do the best thing.

Does the old pension have capital and accumulation units?
What fund is it invested in?

Lincsdebt

I had a small pension of around the same amount. I was able to get it under the Small Pot provision, I just completed some forms and was paid the whole amount. 75% of what you receive will be subject to income tax too if you're a tax payer.


You would just need to tell the company you want to do this and they should send you the relevant paperwork.

dunstonh

Lincsdebt wrote: »

I had a small pension of around the same amount. I was able to get it under the Small Pot provision, I just completed some forms and was paid the whole amount. 75% of what you receive will be subject to income tax too if you're a tax payer.


You would just need to tell the company you want to do this and they should send you the relevant paperwork.

That is one possible solution without knowing what the problem is that needs to be solved.

What if the plan has capital and accumulation units that result in a transfer/exit charge? What if that charge ceases at 60? Is waiting until 60 cheaper/better value?
What if it is one of the plans that is likely to see the exit charge removed under the current review? Is it better to wait until that happens before losing £xxxx in exit charges?

Yours could be a valid solution but I wouldnt want to go there yet based on so little information.

atush

Move it or add to it.

rorysdad

Thanks Lincsdebt.

Not heard of that at all. I take it that you had to wait until you were 55 to draw the money?

RD