Ill-Health retirement - how to continue to invest in a pension

Trying_to_be_good

Hello everyone

Having suffered with acute anxiety for years, I'm being retired on ill-health grounds at the age of 44 (and a quarter). I've been a civil servant for over 22 years and will be given immediate access to my pension without reduction or enhancement, which is a huge relief.

However, this is obviously based on my contributions to date - is there a way I can continue to pay into a pension over and above the £3,600 that anyone can contribute?

Can I reinvest my lump sum? I've tried to read up about recycling but it doesn't talk about ill-health, just over 55s stuff.
Can I reinvest from my pension (i.e. unearned) income? Some is from the 2015+ alpha scheme, some from an equivalent amount from the old classic scheme.

With anxiety it's really difficult to find and talk to a financial adviser and MyCSP and my department have been rubbish, so I'm grateful for any pointers here - thank you.

Mnd

I think that the pension contributions can only be based on relevant earnings or the 3600 you mentioned.
Do you have to take all of the lump sum, could you not leave some in the fund.
And yiuu do have your stocks and shores Isa limits which will be tax free on earnings, but no tax relief on the way in
There will be far more people who know more than me to suggest things later but I hope that this is some help

Trying_to_be_good

Thanks, I can convert some lump sum to pension income, I don't think I can leave it in the scheme. The alpha (newer) pension doesn't have an automatic lump sum, that bit os from the old final salary Classic bit.

I thought I knew about pensions but this is a bit weird for me!

Mnd

The more I read on here it does become clearer. You will get more advice later

Malthusian

If you were working up until now you will be able to make contributions up to your earned income in the 17/18 tax year, minus your pension inputs into the civil service pension scheme (they will be able to confirm how much this is). This assumes you also have enough annual allowance available.

After April 2018 you will be restricted to £3,600 unless you have earned income again.

There are restrictions on the amount of tax free cash that can be recycled back into a pension scheme but they are usually quite difficult to break - see here. You haven't said how much the lump sum will be and how much you want to pay into a pension scheme.

Alternatively you can of course invest in largely the same things you would inside a pension within an ISA or outside a tax wrapper.

kidmugsy

Malthusian wrote: »

, minus your pension inputs into the civil service pension scheme (they will be able to confirm how much this is).

@OP: be aware that "input" in Malthusian's sense does not mean your own contribution. It's much more complicated than that which is why he suggests that you ask your scheme.

Trying_to_be_good

Thank-you - I've worked amongst pensions before, helping others to understand them so hopefully can get my head around the input being the increase and actuarial factors. Pre-anxiety I'd've understood it all!

Good call on the 17/18 earnings contribution - thank you.