Final salary to defined benefit

Reabo

Hi all.
I have a very small residual final salary pension from a company I worked for 30 years ago. I had forgotten about it for 25 years. It will pay out the handsome sum of £56 per year. What I am thinking is transferring this to a defined benefit pension and taking it out as a drawdown and using it towards a house, we are downsizing to clear the mortgage. I have no idea how to do this, how much it will cost or anything. Any advice would be greatly appreciated. I am 56yrs old and the cetv is less than £9k. Thanks in advance.

Dazed_and_confused

Final salary is defined benefit.

You mean defined contribution.

Given the comparatively small CETV you may be able to do this without paying for advice (which is a requirement for larger CETV's).

Are your figures definitely correct though, £9k for £56/year seems quite generous. Or is it £56/month?

tacpot12

You don't need to transfer the value of this pension to another scheme to be able to access it. Because the CETV is less than £9k, you can ask the scheme trustees to pay you the value of the pot as a small lump sum under the "small pot rules". See here for details: https://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum

Be aware that this link is trying to describe the two different methods available to you to take small lump sums - 'Trivial Commutation' and 'Small Lump Sum'. The 'Small Lump Sum' route is more flexible, so I would recommend that route. You might find that the Scheme has a form you can fill in to request to be paid the Small Lump Sum. If you can find a telephone number for the scheme adminsitratiors you can give them a call and ask to be sent the form. If they don't have a form and just want you to write in with your request, they will tell you.

Be aware that 25% of the payment will be tax free, the remaining amount will be taxed as income at your marginal rate. Only if this would result in you paying extra tax might it be worth looking at transfering the pension to DC scheme in order that you can drip feed the money out so as to minimise the tax bill.

xylophone

See

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

Reabo

Thanks for your help guys, will try that.
And yes £56 per annum with an initial payment of £168. That's why I don't think it worth keeping.

Reabo

I have had a reply from the pension company. They say due t a recent court case regarding commutable benefits this option is not available to me.
Any other ideas guys?

tacpot12

Will they let you transfer it to a personal pension?

It would be good to know the name of the court case they think is preventing you from commuting this small pension. Can you find this out and post it here?

GunJack

tacpot12 wrote: »

Will they let you transfer it to a personal pension?

It would be good to know the name of the court case they think is preventing you from commuting this small pension. Can you find this out and post it here?

Judiciary? FBU?

xylophone

They say due t a recent court case regarding commutable benefits this option is not available to me.

Is there any chance of fuller and better particulars?

I suppose it has nothing to do with the Lloyds GMP case?

https://www.pensionsage.com/pa/BLOG-Pension-court-cases-that-will-hit-the-headlines-in-2019.php

xylophone

And try TPAS for advice.

https://www.pensionsadvisoryservice.org.uk/

Reabo

I have emailed for further details