Does a pension that is frozen to further payments count for carry forward?

johnlucas2018

Hi, I wonder if I could trouble those that know for one more piece of advice before going ahead and opening the SIPP.

I have four old Royal London pension policies (pension, serps, transfer in from company), I stopped paying in to these many years ago so the pensions are still live but are frozen to any further payments.I get a yearly statement. I was just wondering if these would allow be to qualify for carry forward allowance. Could I carry forward the allowance to pay more than 40K in to the new SIPP this year or do frozen policies not count.

Thank you for your help

HappyHarry

They are not "frozen", as that has a special meaning with pensions. They would possible be referred to as "paid up". There is a good chance that you could actually contribute further to them.

To answer your question, yes, they do count as far as the rules regarding carry-forward apply. Regardless of whether you can or can't contribute further to them.

johnlucas2018

Thank you very much for the information. I have checked with Royal London and they say that they cannot accept any further contributions to them which is a little annoying. Thanks again.

dunstonh

johnlucas2018 wrote: »

Thank you very much for the information. I have checked with Royal London and they say that they cannot accept any further contributions to them which is a little annoying. Thanks again.

That doesnt change anything in respect of Carry Forward.

Most insurers stop allowing new money to be added to old fashioned pensions which are no longer cost effective (to either them or you). So chances are RL are not letting you do it either because the old pensions are obsolete or that they have safeguarded benefits that are no longer offered.

johnlucas2018

Thanks dunstonh. They recently offered me 70K to transfer one of the policies currently valued around 28K. I am just waiting for all the paperwork relating to growth and charges, etc. At present my preference will be to leave them with them and open the SIPP but this another thing to sort. Complicated things these pensions! Thanks again

dunstonh

They recently offered me 70K to transfer one of the policies currently valued around 28K.

Be careful. On plans investing in a With Profits fund, the current value excludes the terminal bonus. The transfer value includes the terminal bonus accrued to date. Its a quirk of the system. It doesnt mean they are offering you more to transfer. Its just how the it shows the figures.

johnlucas2018

Thanks for the info. My gut feel is to leave this with them. From what I read, Royal London appear to be very highly respected with regards to their pensions. Ideally I would keep paying in with them but they have said that I will need to open a new plan and this would have to be done through an IFA. I did speak to one IFA but he was not really interested unless I wanted to engage him ongoing which I do not really want to do. I am thinking SIPP is the way to go for now. Get some value in it and then maybe speak to IFA when I have a value that is of interest to them. Thanks again for your help.

Flying_Dodo

Royal London are also going through an exercise to offer enhanced transfer values in order to buy out any guaranteed annuity rate built into a number of their older plans. Check the details carefully to see if it's worth giving up any such guarantee.