more than one pension....help!!!

breadboy05

:question: My wife worked for a couple of years for a national newspaper back in the nineties and was ''headhunted'' by another paper and worked there for a couple of years. In both places she contributed to a company pension. Shes had correspondence from both and is now eligible to claim from both. Shes looking at around 25k each, give or take. What is the rules on more than one pension and is there anything else she needs to know about. :question:

BobQ

There is no problem having two pensions.

Are they DC or DB schemes? You seem to know what the pensions are so are they DB schemes?

breadboy05

BobQ wrote: »

There is no problem having two pensions.

Are they DC or DB schemes? You seem to know what the pensions are so are they DB schemes?

What does DC and DB mean BobQ. I'm afraid we are both know-nuffinks when it comes to pensions.....

AnotherJoe

DB =Defined Benefit such as, the pension she gets is £X a year,
DC = Defined Contribution, she paid in £y/month, and ends up with a lump sum of £Z that she can do whatever she wants with.

Since you mention £25k for two years work at two places, almost certainly that is DC, and the sum she has in each, since £25k a year pension for life would seem to be very generous for 2 years?

So with those 2x £25k she can pretty much do whatever she wants with it. Take out £5k a year for 10+ years for example.
Move it into another pension scheme.
Whatever

breadboy05

AnotherJoe wrote: »

DB =Defined Benefit such as, the pension she gets is £X a year,
DC = Defined Contribution, she paid in £y/month, and ends up with a lump sum of £Z that she can do whatever she wants with.

Thanks AnotherJoe. She has just told me it's a DB as she has a yearly figure of £600 ish or she can take out 25% tax free and pay 20% tax on the rest. But that's all we know What we don't know is..... can we do that twice i.e two lots of 25% or are we stuck at 25% of both and will it affect my tax payments?? It does confuse us I'm afraid...

Linton

For the tax free lump sum each pension is treated entirely separately. So she can take 25% of each at different times if that is what she wants. Any other money taken from a pension is taxed by PAYE in the same way as earnings from employment.

xylophone

Your wife worked for X Journal which offered a DB pension scheme. She was in the scheme for around two years

Your wife worked for Y Journal which offered a DB pension scheme. She was in the scheme for around two years.

You mention "£25,000 from each". Do you mean that your wife has been told by each scheme that she may take a tax free Pension Commencement Lump Sum of £25,000 and a pension of £600 a year thereafter?

Your wife has been contacted by the administrators because she has just reached age 60?

Was her employment with these papers pre 1998?

Has she obtained a new state pension statement?

https://www.gov.uk/yourstatepension?utm_source=Mail-Online&utm_medium=Partnership&utm_campaign=GTKY

breadboy05

xylophone wrote: »

Your wife worked for X Journal which offered a DB pension scheme. She was in the scheme for around two years

Your wife worked for Y Journal which offered a DB pension scheme. She was in the scheme for around two years.

You mention "£25,000 from each". Do you mean that your wife has been told by each scheme that she may take a tax free Pension Commencement Lump Sum of £25,000 and a pension of £600 a year thereafter?

Your wife has been contacted by the administrators because she has just reached age 60?

Was her employment with these papers pre 1998?

Has she obtained a new state pension statement?

thanks xylophone,

first things first, yes to X & Y...

it's not a Commencement Lump Sum, we think....according to one of her paperwork, one is a take 25% tax free and the rest at 20% taxed and the other according to the paperwork, offers her a pension of £650 p/a or a residual pension of £500 p/a and a tax free cash sum of £3300.00

she's coming up to her 55th birthday..

yes it was pre-1998..

no, she hasn't obtained a new state pension statement..

AnotherJoe

Where then did the sum of £25k come from you mentioned in the original post?

If there was mention of such a sum, possibly as "Cash Equivalent Transfer Value" (CETV) a alternative for both or either is to take the lump sums of around £25k and place them into another pension plan of her choosing. There are various rules and such like around doing this, more info needed.

£500/year is pretty miserable compared to £25k now. She can then take her time deciding what to do with it.

xylophone

See

https://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum

Is your wife currently contributing to a pension/and or has other pension arrangements?

Has Scheme A contacted your wife to offer trivial commutation?

What is the value of Scheme B?

What is the value of any other pension arrangement?

xylophone

More here

https://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum