pensions 29 September 2007 at 11:46AM edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning 8 replies 954 views

awga6605

Dear All

I have a pension with abbey Life worth £22,000 i opted out of serps in 1988 and haven't made any contributions for about 8 years, i was wondering if there was any way i could access the money now either by transfering the pension to a family member or to a different company or even to sell it on, or any other ideas you may have
Your help would be greatly appreciated

many thanks

Andrew

EdInvestor

Nope.You can get 25% out when you're 55 and the rest as an income when you retire, but that's it.Pensions are like that.If you want access to your capital, don't put it in a pension.

ffacoffipawb

EdInvestor wrote: »

Nope.You can get 25% out when you're 55 and the rest as an income when you retire, but that's it.Pensions are like that.If you want access to your capital, don't put it in a pension.

He may not be able to cash in 25% of the protected rights part of the fund though, but I understand this may change in the future.

DavidLaGuardia

ffacoffipawb wrote: »

He may not be able to cash in 25% of the protected rights part of the fund though, but I understand this may change in the future.

25% IS obtainable (since April 2007)

ffacoffipawb

DavidLaGuardia wrote: »

25% IS obtainable (since April 2007)

OK. Thanks for that. Been out of the pensions industry for many years.

However is there a risk that the 25% tax free cash "anomaly" could be withdrawn at some point?

I guess not, given that the state sector has it in the pension scheme rules.

DavidLaGuardia

ffacoffipawb wrote: »

However is there a risk that the 25% tax free cash "anomaly" could be withdrawn at some point?

I don't think this is an anomally personally and any government would be fool hardy to make pensions less attractive to this extent. If they stopped the tax free cash a basic rate tax payer in retirment would simply lose everything they got in relief and hence have little reason to do a pension. If everything had to be used as an income they would have to offer some sort of incentive.

EdInvestor

If there were any change I'd have thought the additional tax relief offered to HRTs is a more likely target, especially as those with personal pensions receive it outside the pension wrapper.They will get 20% back outside the wrapper from next year.

Very hard to justify such a perk for the better off which also featherbeds the life industry and its distribution system. The argument for it seems to depend on difficulties related to the administration of defined benefit pensions.But these are rapidly fading away.

Wouldn't it perhaps be better to spend the money providing better quality and lower cost long term care, especially for people who succumb to dementia/Alzheimers (which is no respecter of wealth of privilege)?

There might be quite a lot of political mileage in such a policy

dunstonh

If there were any change I'd have thought the additional tax relief offered to HRTs is a more likely target

Whilst they may like to do that, apparantly they cannot without a significant overhaul of the tax system due to the nature of the systems that are currently in place. Apparantly, the cost of changing it would be more than they would gain. I cannot find the source for that info but it was a common discussion point in the build up to A-day and that was given as a reason why it still existed.

Very hard to justify such a perk for the better off which also featherbeds the life industry and its distribution system

It's not hard to justify. People who aspire to earn money and in turn bring in wealth to the country shouldnt be penalised for their efforts.

Wouldn't it perhaps be better to spend the money providing better quality and lower cost long term care, especially for people who succumb to dementia/Alzheimers (which is no respecter of wealth of privilege)?

Higher rate relief removal wouldnt fund those.

EdInvestor

dunstonh wrote: »

Whilst they may like to do that, apparantly they cannot without a significant overhaul of the tax system due to the nature of the systems that are currently in place.

The scuttlebut I heard suggested it created problems for final salary pension schemes and might resault in them being closed down.But since they are being closed anyway....we already know this area is targeted because of the nature of the A day reforms (capped lifetime allowance etc).

Higher rate relief removal wouldnt fund those.

It would help however.The new rules starting late this year mean the Govt will help to the tune of around 8,500 a year (incl AA) for anyone needing some nursing care (not the full 24/7 variety where the NHS pays).It's not much, considering average nursing home fees are 30k a year and average pension income is around 14k.Even if it's a single person and the home can be rented out, there's still likely to be a shortfall.

Long term care may not affect many people in the end, but it punches heavily above its weight in the political arena, along with inheritance tax..