selling a pension fund

Maid_Marion_4

Good morning,

My partner has a pension that is not going to be worth that much when he retires and things that selling it might be a good idea to sell and invest the money. So does anyone know whats the best way, sell to the company with the pension or sell to a company that buys pensions.

thanks

dipsomaniac

the most tax efficient way to invest is in a pension. the reason that it won't be worth that much when he retires is because he hasn't contributed enough into it.

ask him to telephone the pension provider and ask what type of pension he has, how much has been contributed, what is the current fund value, what is the current transfer value and what funds it is invested in. post again with those details and also the name of the provider, age of your partner and whether he has any other pensions or investments.

Andy_L

you cannot "sell" a pension. You can use the money inside it to buy an annuity (a monthly payment for life) when you reach retirement age in which case going for the "open market option" is usually better than sticking with the existing company - as it cost's nothing to get quotes you'd be crazy not to investigate.

dipsomaniac

also, is he a basic or higher rate tax payer?

dunstonh

Apart from the rules not allowing you to sell a pension, there would be no reason for anyone to buy your pension.

e.g. If you have £5000 in an L&G stakeholder pension in their balanced managed fund why should I pay you more for it when I can go to L&G write a cheque for £3900 which the Govt then gross up to £5000 (let alone claiming back another 18% via my tax return).

Like any savings or investment, the more you pay into it, the more you get out. If his retirement planning is that poor, then perhaps rather than trying to get rid of the pension, he should be looking to increase his contributions. With the basic state pension being just £4500 a year, I am sure you arent looking forward to living on just that?

purch

it might be a good idea to sell and invest the money

The 'money' is currently invested

To increase it's performance you can change the way it is invested, and/or contribute more funds