Scottish widows

blokes2

Hi all
I have a Scottish Widows Stakeholder pension that is due to Mature in May.
I took it out in 1993 but stopped paying around 2006
The pot at the moment is around £9500

I read that i can only take 25% as a lump sum on maturity then re invest the rest as a pension income. Is this true ? As there will not be much to re invest.
I can ask them of course but wanted some advice on here first
Thanks

Dox

Do you have any other pension benefits (whether or not in payment), ignoring the state pension?

blokes2

No i do not have any other pension . I am 55 and still working

tacpot12

Stakeholder pensions don't mature, it becomes possible (but not necessary) to take the benefits from them when you are 55.

You can withdraw all the money. 25% will be tax free, the remaining 75% can be left invested or you can draw this out but it will be treated as income so you will pay tax at 20% or possibly 40% if this extra income takes you into the higher tax bracket. You can take the money out in stages (a number of lump sums) or have a monthly income from it. Just be careful with Scottish Widows that you know what the charges will be for this.

Have you looked at the performnce of the underlying investment(s) and are you happy with it? If you are, you can leave the whole lot invested until you actually need it. Your orginal post gave no indication as to why you were thinking of withdrawing your retirement savings.

xylophone

No i do not have any other pension . I am 55 and still working

Does your employer not offer a pension?

If you have no other provision why do you want to access your retirement pension now?

Have you obtained a new state pension statement?

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

blokes2

I wont get much pension from such a small amount so i thought to put it into premium bonds.
I am self employed so dont have an employer pension

dunstonh

I wont get much pension from such a small amount so i thought to put it into premium bonds.

That would be a really bad idea. You should not do it.

You would pay tax on it, reduce your annual allowance (which may or may not be an issue) and likely get a lower return than leaving it the pension.

xylophone

I am self employed so dont have an employer pension

Perhaps you should be contributing to your stakeholder rather than seeking to access it before you retire?

https://www.simplybusiness.co.uk/knowledge/articles/2018/01/self-employed-pension-guide/

https://www.which.co.uk/money/pensions-and-retirement/personal-pensions/contributing-to-a-private-pension-explained/tax-relief-on-pension-contributions-explained-a27f53z7qg3f

And have you checked your state pension situation?

planteria

dunstonh wrote: »

You would pay tax on it, reduce your annual allowance (which may or may not be an issue) and likely get a lower return than leaving it the pension.

i agree that cashing in part of the pension and putting it into PBs is a bad idea... but would b2 pay tax on the 25% if he withdrew it? --i thought it would be a tax free lump sum:undecided. and what is the threshold for it to be deemed a 'small pot' which can all be withdrawn, £10,000? (not that i would suggest that either).

xylophone

what is the threshold for it to be deemed a 'small pot' which can all be withdrawn, £10,000? (not that i would suggest that either).

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Quick_SPOT012_V1.7.pdf

planteria

so the £10,000 is right, but the total of all pots can't exceed £30,000.