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Cash in Pension Pot ?

2

Comments

  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I have an Occupational pension, State pension and she has a small private pension.

    What state pensions for each? Have you done a propper statement? What is her small privaate pension from and how much is the total pot?
    She has a Private pension (pot) that has been paying out for 5 years, and a further six, and is due to re-invest.

    In actual english please. is her pension a pot she has been paying into? Or has she been taking it, and will for another 6 years and is paying in still?
    She has already drawn down some years ago.

    The pot has £77698 Protected Maturity Amount

    Which pension is this? What is her state pension projection?
  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Dirty_!!!! wrote: »
    Probably not spending within a year, but can you take it out ,a bit at a time, and keep below the tax thresholds ?


    yes,


    idf you draw down under or up to the personal allowance for the yar in question- there is no tax to pay. IF you have no other income?
  • atush wrote: »
    What state pensions for each? Have you done a propper statement? What is her small privaate pension from and how much is the total pot?



    In actual english please. is her pension a pot she has been paying into? Or has she been taking it, and will for another 6 years and is paying in still?



    Which pension is this? What is her state pension projection?

    I have a State Pension, she is only 62, so doesn't get one til she is 66

    She has not paid into this pension pot, it was Non Contributory. She started claiming a pension from it 11 years ago. (5 years followed by another 6 years )

    Her State Pension forecast is £8575 pa

    Her small pension is around £2000 pa
  • xylophone
    xylophone Posts: 45,703 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I am still confused.

    Your wife had a private pension which is currently paying £2000 a year. (pension 1).

    She had another pension (policy?) to which she did not contribute - (who did contribute, her employer)?

    The payments were made into this pension (pension 2?) for five years and then your wife took a 25% PCLS, leaving the balance invested?

    Is this balance the £77,000 PMA?

    Will she need to transfer this sum to another provider to be able to draw down on a flexible basis?

    Would she benefit from a Pension Wise appointment?

    https://www.pensionwise.gov.uk/en
  • Xylophone, you're not the only one that's confused !!

    My wife worked for a company for 20 years, and was made redundant.
    She had a Non Contributory pension scheme. Her employer made the contributions.

    The company was taken over by another company, who paid her (11 years ago) to move her pension pot. She moved the pension pot to another provider.

    She started her “small” pension, £1940.52 pa, and this will run for life. (Pension 1)

    She started another pension, (Pension 2) drew down 25%, (think it may be an annuity !) and was paid for 5 years. After the 5 years it was reinvested for another 6 years, which is coming to an end in mid-January.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I'll treat her small pension as £2k p.a. The Personal Allowance for tax year 18/19 is £11,865. So if she draws down £9,865 there will be no income tax to pay. Then in 19/20 the Personal Allowance goes up to £12,500 so she can draw £10,500 with no tax to pay. And so on.

    When her State Pension begins we'll say it will be £9k per year and the Personal Allowance will have increased to £14k per year. So even with the other pension of £2k per year she can draw a tax-free £3k per year (being 14 - 9 -2). You can see that she need never pay tax if she draws her money gradually.
    Free the dunston one next time too.
  • xylophone
    xylophone Posts: 45,703 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Your wife was a member of a non contributory occupational pension scheme?

    She was made redundant when her company was taken over.

    She could have remained a deferred pensioner of the scheme but accepted a sweetener from the acquiring company to transfer the occupational pension to an arrangement with another provider.

    Does the £1940.52 derive from the arrangement with the other provider?


    She started some sort of personal pension and took 25% as a tax free lump sum five years ago, leaving the balance invested?

    The balance of this pension is the £77,000?

    If so and she wants to draw it down flexibly, will the pension provider permit this or will she need to transfer to another provider?
  • Kidmugsy, that sounds so good.

    BUT are we allowed to take the pot gradually like you suggest ?

    And what happens to the remainder of the pot, after taking a portion ?
  • xylophone wrote: »
    Your wife was a member of a non contributory occupational pension scheme?

    She was made redundant when her company was taken over.

    She could have remained a deferred pensioner of the scheme but accepted a sweetener from the acquiring company to transfer the occupational pension to an arrangement with another provider.

    Does the £1940.52 derive from the arrangement with the other provider?


    She started some sort of personal pension and took 25% as a tax free lump sum five years ago, leaving the balance invested?

    The balance of this pension is the £77,000?

    If so and she wants to draw it down flexibly, will the pension provider permit this or will she need to transfer to another provider?

    She accepted the sweetener, and moved to another provider.

    The £1940 was an annuity that was bought 11 years ago.

    She took the 25% 11 years ago ,

    The residual money is just over £77K

    With regard to the drawing down flxibly, we will have to contact the pension provider.

    Thanks
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    edited 28 November 2018 at 10:12AM
    Dirty_!!!! wrote: »
    Kidmugsy, that sounds so good.
    BUT are we allowed to take the pot gradually like you suggest ?
    Yes as long as your provider supports this function. If they don't you switch to one that does.
    Dirty_!!!! wrote: »
    And what happens to the remainder of the pot, after taking a portion ?
    It remains there of course !

    The bit I don't understand is you say it was invested for 6 years and then it will be invested for 5 years. Normally you'd just invest, no timescale. Are these some sort of fixed term bonds or similar she is buying? I think you will need to name the pension provider and the type of investment as this is unusual. As said, not all pension providers allow ad hoc draw down so she may need to transfer it.
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