Old Private Pension

dunstonh

When I was 55 and they brought in pension release

There have been no rule changes on that front. The age 55 rule was established in 2006 to become effective from 2010. So, you transferred after the rule was changed.

I can only have all of it out in one go.

That is not correct.

But now I want to use it to pay off mortgage and find an easier job or a few months off work.

Still not likely to be suitable in the way you are doing it.

R1chP

Paul_Herring wrote: »

If, indeed, it is in the LGPS scheme - that appears to be ambiguous at the moment.

I have the letter from County Council Pensions Manager confirming they received a cheque from Phoenix giving me 7 years 135 days service credit in the LGPS in 2007.

I will start the ball rolling again or get written confirmation and pay off mortgage with it.

Many thanks all.

R1chP

dunstonh wrote: »

Still not likely to be suitable in the way you are doing it.

Can you enlighten me please as I want to pay off mortgage and not have the house at risk if I drop to a part time job or a more local lesser paid job.

xylophone

I will start the ball rolling again or get written confirmation and pay off mortgage with it.

Assuming that this pension is still with Phoenix, why not transfer the pension to a SIPP so as to be able to access it flexibly?

Once you have established that you have the pension, try an appointment with Pension Wise for an explanation of your options.

https://www.pensionwise.gov.uk/en

R1chP

xylophone wrote: »

Once you have established that you have the pension, try an appointment with Pension Wise for an explanation of your options.


Thanks, will do.

The Phoenix pension (if true) is only predicting a pension of £1400 pa at 65 so I hope it will be better served paying off mortgage, otherwise I'm paying that until I'm 72.

If that fails I will over pay mortgage even more.

R1chP

dunstonh wrote: »

possible reasons:
1 - Transfer never took place
2 - Only the non-protected rights was transferred and the protected rights was not.
3 - mistake

The retirement pack I requested 2 years ago has a Cash-in Lump Sum Quotation which says:

Total pension fund value £53637.00 which includes a former protected rights value of £53637.00.

Does that mean anything?

Thanks.

Linton

R1chP wrote: »

The retirement pack I requested 2 years ago has a Cash-in Lump Sum Quotation which says:

Total pension fund value £53637.00 which includes a former protected rights value of £53637.00.

Does that mean anything?

Thanks.

It suggests Dunstonh's theory 2 was correct, otherwise no other impact. The restrictions that applied to Protected Rights were abolished some time ago so you can ignore that part of the statement.

dunstonh

R1chP wrote: »

The retirement pack I requested 2 years ago has a Cash-in Lump Sum Quotation which says:

Total pension fund value £53637.00 which includes a former protected rights value of £53637.00.

Does that mean anything?

Thanks.

I believe it was not possible to transfer protected rights funds into LGPS. So, if your pension was made up of a mixture of protected rights and non-protected rights then only the non-protected rights would have been transferred. This would leave the protected rights behind in the pension.

Most DB schemes would not accept protected rights.

AnotherJoe

Great news RichP, so that is a legitimate amount of money, not a mistake, and you can access it. No need to ask if it was a mistake.

As said, if SA/P wont allow you to access it gradually, then to avoid a big tax hit, transfer it to a SIPP as cash, keep it as cash, and take it out over 2 tax years to avoid bumping up into high rate tax bands. The first year could be this tax year, then the other half next April. Also, to avoid hitting a high tax rate immediately, take out £500 first, that will set you up with a 20% tax code and a couple months later when teh SIPP provider have that code you can take the rest of the half out.

Hargreaves Lansdown would likely be your best bet for a SIPP, since for cash, they make no charges.

Make sure there are no overpayment limits or anything like that on your mortgage that would cause additional charges to be made.

xylophone

If you take the whole of the pension from the Phoenix policy (supposing it is £50000), you would receive a tax free PCLS of £12,500 but the balance
(£37,500) would be taxable as income in the year of receipt.


You already earn £19,000 per annum - some tax would be due at 40%.

There is also the matter of the emergency tax to consider.

https://adviser.royallondon.com/technical-central/pensions/benefit-options/emergency-tax-and-lump-sum-withdrawals/

If you transferred out to a SIPP, you would be able to take the PCLS but then manage the withdrawals over two or more tax years so as to avoid paying any tax at 40%.