DB transfer and 2 small pensions.

ianthy

I am currently transferring my DB pension into a SIPP, I will take the max cash lump sum. I also have 2 really small pensions Standard Life £300 and UPS £2k. Is it possible to simply close the 2 small pensions and take the cash? is the first 25% tax free on the 2 small pensions tax free and how does this affect the 25% tax free allowance on my larger DB Pension? I have read a few sites including Pension Wise relating to trivial pensions totalling max of £10k and 3 pensions, but I am not 100% clear. I will be aged 55 in July.


Thanks for reading.

jamesd

Assuming that both SL and UPS are defined benefit it is likely that their expected benefit value is less than £30,000 and that you can transfer them without advice, though maybe not the UPS one. That is likely to pay you more than trivial commutation because of the rules involved an calculating the CETV used to work out how much you get when transferring. Ask them.

Knowing why you want to do this can also be useful because the people here can be very creative in coming up with interesting options and optimisations to improve the result.

ianthy

jamesd wrote: »

Knowing why you want to do this can also be useful because the people here can be very creative in coming up with interesting options and optimisations to improve the result.

Thanks for the reply. By closing out the 2 small pension funds, I just want to tidy up loose ends. They are unlikely to grow significantly as I no longer contribute to either of the schemes. They are too small to transfer into my existing SIPP. There is always something to spend money on.. so cashing in these 2 small pensions would work. I have now requested a CETV statement from UPS.

jamesd

Hargreaves Lansdown has a minimum combined transfer value of only £1,000 so it might be a useful tool.

ianthy

jamesd wrote: »

Hargreaves Lansdown has a minimum combined transfer value of only £1,000 so it might be a useful tool.

Thanks I will check it out for the UPS pension at least.

xylophone

You may find HL unwilling to accept UPS as it is a DB scheme (albeit small).

However, see 2a here

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

and 2b in respect of Standard Life.