Cashing in small pensions

newbiesaver55

Husband and I have a few small pensions which we aren't contributing to...

Is it possible to take the £ out and invest it elsewhere? Is there an amount under which I can do that? E.g.) £8k £12k etc...

kidmugsy

Have you reached age 55?

jamesd

Provided you are 55 or older you can take money completely out of a pension, but there's a catch. No problem to take 25% out but if you take even a penny from the rest you will be limited to no more than £4,000 a year of pension contributions for the rest of your life.

There is an exception to that cut. You can do it for up to three pots of up to £10,000 each in your life without triggering the cut, provided you are taking out all of the money in the pot. If you want to do this, you can transfer first to get as close to £10,000 as you can so you don't use more of the three than you need to.

You can also at any age just transfer to another pension scheme that gives you more investment options.

Daydreamers

What if the pots just over 10000? Mines about 10300 - I want to take it in about 2 years time ?

jamesd

You could transfer the extra to another pension to get under the £10,000.

newbiesaver55

Such convuluted rules! I'm many years away from 55 so I suppose the rule will no longer be valid by the time I get there!

Thank you for the heads up.

Number75

Not really convoluted when JamesD can summarise it in one short post!

As you say that you're many years from 55, and think the rules will change... I thought it worth adding that there has long being talk that the age off access will change to state pension age minus 10 years - so, 57 or 58.

I believe that this was proposed at the same time as 55 but not yet legislated for - but definitely to be watched for in future planning.

PensionTech

Is it possible to take the £ out and invest it elsewhere?

Why would you take it out to invest it? You can just manage the investments within your pension, provided it's the more common type of pension (DC).

dunstonh

Is it possible to take the £ out and invest it elsewhere?

Pensions can have the same investments and be the same cost as ISAs and most unwrapped holdings. So, there is little point taking it out of the most tax free environment it is currently in to put it into a less tax free environment.

newbiesaver55

Thanks for all these great replies and info.

It's good to know the options.

newbiesaver55

I take it one cannot transfer a pension to a spouse..? Trying to rebalance pensions following giving up work to look after children..