Protected rights/ non protected rights

lindabea

My pension has amounts against PR and NPR. Can someone please explain the difference between these? Also, I understand that I can cash 25 % of the pension - can I have 25% for both the PR and the NPR amounts.

jonathon_hart

Protected Rights is the replacement for your State Second Pension. It means that for a period you have been "Contracted-Out". During this period you will have been paying reduced National Insurance contributions - however you will not have any entitlement to the state second pension for this period (you will still get the Basic State Pension though). The money that would have been paid towards your state second pension has been invested into your pension plan instead.

Non-Protected Rights are basically all other contributions!

From the best of my memory you generally can now take 25% of the Protected Rights as cash, check with the scheme administrator to confirm though.

Thanks

Jonathon

lindabea

Thank you Jonathan for your reply. Can I take 25% in cash of both the PR and NPR?

EdInvestor

lindabea wrote: »

Thank you Jonathan for your reply. Can I take 25% in cash of both the PR and NPR?

In theory you can, but at the moment it's only guaranteed for the protected rights part if you convert the remaining 75% into an annuity ( a guaranteed taxable income for life with a compulsory spouse's pension).

As yet it is very difficult to put PR money into income drawdown (where you don't have to draw an income) unless your total fund is quite large.

dunstonh

Drawdown isnt difficult to put PR money in. There are reduced options but its still possible and can actually be cheaper than those that are often mentioned on here for ordinary rights.