not allowed pension

sheilavw

forgive me, I am not clued up on pensions. Unfortunately, my Husband was diagnosed with motor neurons disease 17/7 . He has a pension he paid into 1978 to 1991 from a previous employer. We never here from them. Hes written to them about his health. They have replied saying that they have no ill health provision, and has the pension is less than gmp he cannot have it. He is 59, I thought you were allowed 25% tax free? I was looking for the letter to put a quote in but cannot find it! They did say he could transfer it, but didnt give a figure so we have no idea of a value. Would we benefit from making an appt with a specialist?
Thanks

Thrugelmir

Is your husband due to receive this pension at 60?

squirrelpie

Would we benefit from making an appt with a specialist?

From the sound of it, yes. Make an appointment with an IFA who specialises in pensions. The INDEPENDENT part of Independent Financial Advisor is very important.

p00hsticks

The 25% lump sum is for 'Defined contribution' pensions - i.e. ones where you simply have an invested pot of money made up from you and your employers pension contributions.

It sounds like your husband may have a 'defined benefit' pension - where when you reach the scheme retirement age you get paid a regular sum of money linked to your previous salary every month (or year) for the rest of your life. Some schemes also offerthe option of a lump sum in return for a lower monthly payment.

If your husband has one of the latter, then providing he is more than 12 months away from the scheme retirement age he can ask the pension scheme to quote him a 'cash equivalent transfer value' (CETV). He could then transfer this sum into a defined contribution scheme, although this is often not recommended and if the CETV value is more than £30,000 you are legally required to get advice from a suitably qualified Independent Financial Advisor to ensure that you are doing the right thing.

sheilavw

thanks everyone . I think we need to get advice. I do know that it increases byn7.5% a year from an old letter. We never get any updates.

xylophone

It seems that your husband has a deferred DB pension with GMP.

https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

It is quite possible that a GMP test has been done and not "passed" - see

https://forums.moneysavingexpert.com/discussion/1439747/guaranteed-minimum-pension-early-retirement

That said, it is rather surprising that as a DB Scheme, there is no provision for early payment on grounds of ill health.

Be aware that if the value of the benefits is greater than £30,000, your husband will be required to take the advice of a Pension Transfer Specialist.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/pension-transfers-conversions/

https://www.ftadviser.com/pensions/2018/10/04/devilish-details-of-fca-s-pension-transfer-rules/

xylophone

Is this your husband's only pension?

sheilavw

no he has one he paid into himself , brittanic ( now phoenix) because his old employer didnt hsve s scheme

xylophone

no he has one he paid into himself , brittanic ( now phoenix) because his old employer didnt hsve s scheme

Has he looked into accessing it?

sheilavw

yes just 25% tax free