Puzzled. How much will I get???

dleafy

Hi all,
I'm 53 in December and was planning on cashing in an old Aviva works pension which was 'frozen' in 2012 when I left my last job.
I started a new Scottish widows pension the following week with my new job which I still pay into.
The frozen Aviva pension is worth just over £42,000.
How much would I be able to get if I cashed it in when I’m 55?
Apparently, it's only worth around £500 per year....so I'd rather get as much as I can when I'm 55. I believe you have to pay a lot of tax.

Thanks

dunstonh

I'm 53 in December and was planning on cashing in an old Aviva works pension which was 'frozen' in 2012 when I left my last job.

Aviva dont have any pension which is frozen. I suspect you mean deferred.

How much would I be able to get if I cashed it in when I’m 55?

Depending on your income level, you could lose half off it in tax.

Apparently, it's only worth around £500 per year....so I'd rather get as much as I can when I'm 55.

No, its not worth £500 a year. Even if it didnt grow a penny more it would pay over £2000 a year.

What would you do with the money at 55?

dleafy

Thanks for the reply. I guess it’s deferred. Not entirely sure what I’d do with it yet.
I’ll see if I can post a screen shot

dleafy

Sorry, I don’t have any photo sharing accounts to post a screenshot.....unless there’s a simple way?

AnotherJoe

Open a photo sharing account?


For some reason Dunston often posts the correct but potentially misleading comment about people losing lots of their pension in tax, such as half. .And sure thats true if you cashed it in in one fell swoop. On the other hand you could take it out over a few tax years and likely pay what is effectively 15% tax on it. Just the blanket assertion you could lose half doesnt give people any idea you could lose less. A lot less. Perhaps more useful to say said "depending on the period of time you take it out over, you will lose between 15-50%."

dunstonh

This £500 is a synthetic projection using assumptions. The assumptions on statements are dreadfully low and use options that most would not use. It factors inflation, joint life annuity on an indexed basis and usually gives figures 3 to 4 times lower than reality. Also, the projection rates are very low. Sometimes even negatives. All synthetic and not real world.

For some reason Dunston often posts the correct but potentially misleading comment about people losing lots of their pension in tax, such as half.

Because, depending on your situation, you can pay over half the pot in tax. Highest rate relief, loss of personal allowance, loss of tax credits, child benefit etc.

On the other hand you could take it out over a few tax years and likely pay what is effectively 15% tax on it.

Or maybe better to point out the projections are flawed with current assumptions and the pension is not worthless.

xylophone

This is a defined contribution pension?

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

marlot

dleafy wrote: »

...
How much would I be able to get if I cashed it in when I’m 55?...

Is there any reason for just 'cashing it in'?


You could pay a lot less tax if you take it out over a few years.


Are you still working? What (approximately) is your gross salary and we can guide.


I have a similar pension which I'm planning to gradually drawdown over ten years.

dleafy

Thanks for the input guys. It's really useful for someone like myself who hasn't a clue about pensions.
I'm currently working, have done since 16, earning £30,000 gross per year.
I am looking to get as much of this pension as I can, as soon as I can.
Just seen too many people pay in all their life and not even reach pensionable age.
My wife also works (social services) and earns around the same. Our mortgage is nearly paid on our £180,000 property and we also have a second property worth around £80,000.

[Deleted User]

Hi,

dleafy wrote: »

Sorry, I don’t have any photo sharing accounts to post a screenshot.....unless there’s a simple way?

you can use this, don't have to sign up.

dleafy

Cheers,
Left for work now, but will look into photo sharing tonight