Taking personal pension lump sum process/timescale.....

phoebe1989seb

Sorry if this is a stupid question but I'm afraid I know virtually nothing about pensions

DH will be 55 in July and has recently discovered a long-forgotten pension he took out with Prudential. It doesn't amount to a great deal so we've decided it might make sense to take the 25% tax free lump sum as soon as he's able to as it would enable us to complete our renovation project without any borrowing. (Property is owned outright).

Can anyone give an idea how long the process will take once he's of age and sets the wheels in motion please?

Thanks in advance.....

Marcon

Start the ball rolling now by checking what sort of paperwork the Pru will need from you and ask them to confirm the timescale. Even if he can't access the cash until he is 55, things like birth certificate etc can be processed ahead of time, so with luck payment should be reasonably rapid (although note my weasel words...hence suggesting you get the Pro to commit themselves!).

dunstonh

Can anyone give an idea how long the process will take once he's of age and sets the wheels in motion please?

It is probable that the Pru plan doesnt support income drawdown. So, it will likely need transferring to another pension.

Pru are a bit sluggish at the moment (ever since things moved to Lancing). So, I would put it in weeks to transfer it and then depending on where you transfer it to, it will range from 20 minutes for the PCLS to arrive to 3 weeks.

The transfer bit can be started now.

phoebe1989seb

Thanks very much for your helpful replies, Marcon & dunstonh

Albermarle

You should start looking around for which pension provider you will transfer the pension to .
There are quite a lot , although some will only open a pension for you through a financial advisor.
In this case there is a cost for the advisor but they should get a good deal for you with the right underlying investments
.If you DIY , it will be cheaper . In fact it is very easy to open and transfer most pensions online but you have to make some decisions about where the money will be invested . Although most mainstream providers will give you some general guidance and offer you a simple/easy option(s)

dunstonh

.If you DIY , it will be cheaper .

Not necessarily. Plenty of DIY options are very expensive. If you DIY well, it can be cheaper. If you DIY badly it can be more expensive.

phoebe1989seb

Hi all,

So, life got in the way and I'm afraid we haven't yet dealt with this...but in the interim a statement arrived from the Pru that breaks the figures of his DC pension down (the other recent paperwork we had from them didn't do this) into -

a) plan value
b) final bonus

It states that the current transfer value is c (a+b).

This has left us more confused

I understand that should DH choose to transfer the pot into another scheme (or a SIPP?) the whole amount (c) is transferable - it says this on the statement.

However, if DH wants to drawdown the 25% tax-free lump sum, is that 25% of the plan value only? I assume that is the case, although I've struggled to find the answer despite much googling (not helped by terrible internet in our rural location )

Thanks in advance for any further help!

westv

It's 25% of the whole sum.

xylophone

It doesn't amount to a great deal

How much is involved?

Would he plan to take any income from the pension on top of the lump sum?

Is he currently contributing to a DC pension?

Albermarle

You would probably benefit from contacting The Pensions advisory service. It is a free Government backed service and they will not try to sell you anything.
https://www.pensionsadvisoryservice.org.uk/

cfw1994

Albermarle wrote: »

You would probably benefit from contacting The Pensions advisory service. It is a free Government backed service and they will not try to sell you anything.
https://www.pensionsadvisoryservice.org.uk/

Yup, this would make sense.

I actually spend 45 minutes with someone from TPAS earlier this week: they are pretty good on the basics (for me it kind of clarified some of my beliefs, always nice to do, even when this forum helps immensely!).
Note that they do not give 'advice', just explain some of the mechanics and details.