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Protected rights/ non protected rights

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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.
Before doing something... do nothing

Comments

  • 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
    I have worked for 5 years as a Pension Administrator and then a further year in a non-administrator pension role. I am not (and never have been) an adviser. Do not take anything I say as advice, it is information given on the best of my knowledge.
  • lindabea
    lindabea Posts: 1,530 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Thank you Jonathan for your reply. Can I take 25% in cash of both the PR and NPR?
    Before doing something... do nothing
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    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.
    Trying to keep it simple...;)
  • dunstonh
    dunstonh Posts: 119,599 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    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.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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