LG Final salary pension

SERENBABY

Hi, just hoping someone can suggest best way to go about this or recommendation of who to approach.
I have a Local Government pension am 55 and need to release some cash for major repairs to home. I have no other way of finding money as I have no savings, only one income as partner been seriously ill for 2 years and poor credit history. In order to release some cash I have to transfer the whole amount to another pension holder and then release part of the money. I realise in an ideal world this would not be the best thing to do but have no other options. Can anyone suggest a reputable advisor or pension supplier. I am in cheshire.

roomaniac

I am sorry, you are not going to want to here this, but I would strongly advise you no to do it! Reputable advisor or not, you will get ripped off. The conversion rate is not good. The transfer value you will get will not reflect its real value and the pension you will be able to purchase will be a fraction of what you should get if you stay in the scheme. You would also be giving up the built in benefits, such as widow/widowers pension and death in service payments should the worst happen. It might also make you more vulnerable to redundancy as those over 55 not in the pension scheme are cheaper to get rid of (it is called pension strain, i.e. what they would have to pay into the scheme for you accessing your pension early. It is often more than the redundancy payment).
Not all private schemes allow you to only withdraw the 25% tax free part. Many deduct tax on 75% of every withdrawal.
I have a former colleague who was in not dissimilar circumstances and was considering the same option, so I helped them look into it. I did not look like a good option at all. I guess they were 'lucky" in that they were offered voluntary redundancy, so were able to access a redundancy payment, their pension and lump sum.
I know it is difficult. You would not be considering it if you were not desperate, but it would probably be the most expensive financing you could arrange.
Have you considered asking your employer for a loan? Some public sector employers offer these, recovered from pay. They are often very sympathetic as they know the stress involved in these situations. As you are 55, if you were made redundant you would automatically access your pension and lump sum, so it would be a fairly secure loan for them. If they will not advance you the whole amount, they might advance you part of it, making it cheaper to access other borrowing. Also check if you have a local credit union, they might be able to help with an affordable loan.
I believe that you can temporarily opt out of the local government pension scheme or go onto half contributions to help you repay a loan.
It might also be worth talking to your local CAB. When my father got into difficulties maintaining his home, he discovered by chance that his council offered grants to private householders for some types of major repair. It probably varies, but some do offer grants and loans because they want to make sure their local housing stock is maintained.

I am sorry that you are in this position, but I would only transfer my LG pension as an absolute last resort. It is the one real bit of security we have.

xylophone

You have a defined benefit pension.

If the value of your benefits exceeds £30,000, before you could transfer out, you would need to have taken advice from an IFA with the necessary qualifications and permissions.

You might not even be able to find one who would take the case.

See this thread https://www.gov.uk/government/publications/application-for-a-state-pension-statement

SERENBABY

Thanks for the advice. However, I no longer work for LG so asking for a loan is not an option and years of ill health and financial struggle have left us with poor credit history and and therefore no chance of obtaining fianance. I am aware of grants available from local councils but don't think I qualify. We released part of my husband small pension last year but this was not enough for what we needed and it may be we will have to release the small amount left in his as the quickest option.

System

Ask your pension administrator and your ex-employer whether it is available in any shape or form, utilising the Lump Sum option to help your current situation.

There is a Scottish Scheme that is similar and one of there employer members has this

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwjryc7S5bjMAhWjKcAKHV4JCuMQFghAMAA&url=http%3A%2F%2Fwww.westlothian.gov.uk%2Fmedia%2F1635%2FEarly-Release-of-Deferred-Pensions-Benefits%2Fdoc%2FPensionsCompassionateEarlyReleaseDeferredBenefits.docx&usg=AFQjCNGYBwCpYQ7OCM6HD2teBfXVHCdCjA&sig2=ExC33eL25nA4nQldCkv9pw

[FONT=Times New Roman, serif]West Lothian Council[FONT=Arial, serif][/FONT][/FONT]

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PROCEDURE FOR DEALING WITH REQUESTS FOR EARLY RELEASE OF DEFERRED PENSION BENEFITS ON COMPASSIONATE GROUNDS

1. Requests for Early Release of Deferred Pension Benefits

Part 1, Paragraph 1, of the council’s Policy on Applying Discretionary Pension Provisions, provides that a former employee aged 50 or over may request the early release of deferred pension benefits on compassionate grounds.



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