What to do

Mnd

Please don't take it out, do some research and keep it invested as suggested

AlanP_2

keat63 wrote: »

I hate the tax man as much as anyone.


My comments are purely scenarios running around my head.
The pension would probably pay out around £15.00 per week if I were lucky.
That's not even beer money, so it's not worth taking as a pension.


If I take the lump, I'll pay a fair amount in tax, leaving me with less to invest, whether this be premium bonds and hope for a win.
I lost confidence in ISA's many years ago.



If I transfer it, and wait another 15 years, it will still only be worth beer money at best.

No it won't. If you transfer it to a different Personal Pension and leave it invested it will change in value as the underlying investments change in value over the remaining years until you need some / all of it to pay for your retirement.

Newer PPs typically support flexible draw down options, where you can take an amount per year / month or whatever meets your needs at that point in time.

You can time your withdrawals to optimise your overall tax position. For example you might retire at 60 and withdraw everything from that pot over the next 7/8 years, paying BR tax on what isn't tax free to "replace" what you will get at 66-68 as your State Pension.

Have you worked out what you NEED and WOULD LIKE as your retirement income and what each of your pension post & State Pension could contribute and when?

AnotherJoe

keat63 wrote: »

The paperwork recieved yesterday would indicate that I can't leave it where it is.
If I could, then I probably would.


The letter gives the impression that I can take the pension or transfer it to thier cash fund.
Either way, it's not going to increase in value and is hardly worth taking.

Then transfer it to another provider and invest it.

You might "not understand pensions" but this isnt rocket science.

1. You have a pension with "The Peoples Pension".
2. The Peoples Pension" have some options at age 55 none of which are suitable for you.
3. Transfer it to a SIPP. (fill a form in, job done) which does have options which will be any mainstream SIPP.
4. Pick some middle of the road investment fund.
5. Leave it until you need the money.


You'd have to work very very hard and really try, to not understand the above, which to simplify even more, is merely the concept of taking money from one place that's inflexible, and moving it to another that is flexible.

And if you think £26k is "beer money" I"m not going on a bender with you.

Finally, your idea of paying a huge whack of tax and putting the remainder in PB's is barking and should have you locked up for committing fraud against yourself, and is easily among the top ten most stupid ideas I've every read on these forums, ever. (And there have been some real doozies as well)

System

All good comments folks, thanks.


The point I'm really getting at, is it's pretty much worthless as a pension fund.
If I take it now, It will pay me pocket money.
If I put it in another pot, and it increases inline with inflation, it will still only be pocket money.
So as investment or pension, it's not going to do a lot, at this late stage.



I think my best bet is just to transfer it, so I don't have to think about it for another 15 years. :-)

Linton

£26K is hardly "pocket money". Not to me anyway.

dunstonh

The point I'm really getting at, is it's pretty much worthless as a pension fund.

It is £26,000. If you feel that way, donate it to charity.

If I put it in another pot, and it increases inline with inflation, it will still only be pocket money.

Investments typically give you growth in excess of inflation.

So as investment or pension, it's not going to do a lot, at this late stage.

Pensions are a tax wrapper for investments. In the pension, it is worth more than unwrapped as you would have paid 40% tax on the bulk of it if you draw it.

xylophone

My current pension is with Peoples Pension.

The old pension is with the Pru.

You don't need the money now - apparently you cannot leave the old pension where it is.

Arrange transfer to People's Pension?

Have you obtained a new state pension statement?

https://www.gov.uk/check-state-pension

System

I'm not suggesting for 1 minute £26k is pocket money, far from it.
I'm suggesting that £15 per week is.
:rotfl:

AnotherJoe

keat63 wrote: »

If I put it in another pot, and it increases inline with inflation, it will still only be pocket money.

If you think £26 THOUSAND POUNDS is "pocket money" you need someone to take control of your financial affairs.

Or alternatively, you are Bill Gates and I claim my £26k.

dunstonh

keat63 wrote: »

I'm not suggesting for 1 minute £26k is pocket money, far from it.
I'm suggesting that £15 per week is.
:rotfl:

£26000 doesnt generate £15 pw. £25pw if taken now. However, that is just one method. It is not the only one.

A lot of people with small pensions that they are not going to be reliant on for income use them to make periodic ad-hoc withdrawals of £1000 or £2000 in retirement. To pay for capital expenditure items or treats.

You are only coming upto 55. If you left it to your planned retirement age it could be double or more.