Final Salary Pensions

Boerboel

I have two small pensions and was recently told I may be able to take the smaller one as a trivial commutation as it is under £30k (£27k minus tax), however because the total of the two would take me over this limit it made me ineligible to receive it. Is there any way I can get round this? As I have the two it makes sense to me to keep one and cash in the other, what doesn't make sense to me is that someone with only one can take it leaving them with nothing!! I am 63 and do not have a job so these two pensions of £200 monthly are my only income,so what for some would be a very nice windfall, for me it would have been a lifeline.

xylophone

Are you already drawing these pensions?

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf

http://www.pruadviser.co.uk/content/knowledge/technical-centre/small_pots_defined_benefit_trivial_commutations/

Boerboel

Yes already in receipt of monthly payments and they are both db occupational. What I still can't understand is the reason the government/tax man adds the two together so stopping me from taking one.

xylophone

Incidentally, what is your situation regarding state pension?

If you are not yet eligible, have you obtained a new state pension statement?

https://www.gov.uk/check-state-pension

xylophone

Yes already in receipt of monthly payments and they are both db occupation

See first link in first post for the rules.

Boerboel

Not eligible till 3 months before I am 66 for sp I am male and not asked for statement.

Silvertabby

Not eligible till 3 months before I am 66 for sp I am male and not asked for statement.

You can get a statement on line now, which actually gives more information than a written statement.

Boerboel

Can't get statement on line as have lived abroad for nearly 10 years, however what has my state pension got to do with my original question ��

Silvertabby

Can't get statement on line as have lived abroad for nearly 10 years, however what has my state pension got to do with my original question �� Posted by Boerboel

It's something that xylophone always asks - so you have the full picture. In your case, your DB pensions are 99% certain to have been contracted out of SERPS/SP2, and so your State pension will be subject to a contracted out deduction. It's best to find out now just in case you assume that you will get the full single tier pension.

Boerboel

OK many thanks for explanation :-)

xylophone

OK many thanks for explanation :-)

And see https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf