Private Pension too small to transfer.

Cat24

Hi All

I have 3 private pensions, all with different providers, two of the pots are under £1000 and are not being paid into. I tried to transfer one of them into my 3rd (larger) pension and was told I could not transfer them if the value was under £1000.

My question is; does anyone have any ideas with what to do with the smaller pensions?

I'm nowhere near retirement age and not likely to be able to restart paying into the pots. If the answer is I can't do anything with them, that's fine, I would just like to know either way.

Many thanks for reading.
Cat

dunstonh

My question is; does anyone have any ideas with what to do with the smaller pensions?

Leave them until you retire and consolidate then. You would likely use a a new plan in retirement and its the combined value of all plans that matters. Not individual ones.

Or consolidate it them into a new plan now that has no minimum.

LHW99

Just keep a record of who they're with and update your address when necessary.

I had one worth exactly £96 which couldn't be transferred, so was drawn as a small pot at the stated retirement date.

The companies won't lose them - you just have to make sure you don't forget about them.

TheShape

Can someone tell me more about the rules for taking small pots (the 'small pot provision'?). Can you take the money out tax free and is it therefore tax efficient to have one or more small pots to take?

xylophone

http://www.scottishwidows.co.uk/extranet/literature/doc/FP0473

Enjoy!

LHW99

Small pots are treated just like normal pensions so 25% is tax free (the lump sum) and the remaining 75% taxed at your 'normal' income tax rate.
So for example if you were already at the top of the 20% tax band, then taking any pension money at the same time would push you into the 40% and the taxable part of the pot would be taxed at 40%.

Cat24

Thank you for the replies, very helpful.

jamesd

Hargreaves Lansdown will take transfers of very small pots provided the total value is at least £1,000.

There's one key difference between taking a pot using the small pots rule and normally: you don't have your annual allowance for pension contributions cut from £40k to £10k. Since the limit is just three of these per lifetime it's also useful to transfer pensions to get close to but still below the maximum pot size of 10k to reduce how many you use each time.