Protected Rights Pension

Macx61

I have just turned 55 and wish to take a lump sum from one of my pensions. This is a 'Group personal pension plan' (Personal Pension with profit) and it states it is 'Former protected rights'.
I believe this is the SERPS pension and was started when I was advised to contract out. My question is, if I do take a lump sum, or all of it, will this affect/reduce my state pension when I'm 67 and able to retire? There is no drawdown option on this. 25% tax free and the rest as an annuity, or a lump sum. Any advice would be appreciated.

DaveMcG

Taking your benefits won't affect your state pension entitlement. Having contracted out might affect them, but it depends on a number of factors.

You should consider moving the pension to a SIPP where all options will be available.

AnotherJoe

I moved my former protected rights to my SIPP a few years back. Most SIPP providers will do all the work for you, you fill a few forms in and a few weeks later the money is in your SIPP.

The fact its former PR is irrelevant now, and makes no difference whatsoever to your state pension, that damage, if done, is in the past.

dunstonh

There is no drawdown option on this. 25% tax free and the rest as an annuity, or a lump sum. Any advice would be appreciated.

You have the full range of options available to you. Just because your current plan doesnt support them, does not mean you do not have them available. You just move it to one that does.

Your state pension is already reduced from contracting out. So, using the money now and not later will reduce your retirement income. However, it will not reduce the state pension any further than it already has been.

xylophone

Have you obtained a new state pension statement?

Your starting amount will have taken account of your contracted out years.

If it is less than NSP (£155.60 a week), you will be able to add to it through contributions/credits up to SPA which reduce the effect of the deduction for contracting out.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/512799/your-state-pension-statement-explained-dwp042.pdf