Small Pension Advice

WoodyMax

Hello everyone,

I am a widow aged 59 (my husband had no occupational pension). I will be able to get a DB pension in 11 months time from my past employer.

I also have a small pension in a Local Government Pension Scheme. Which at 65 or 66 is roughly worth £550-600 per annum. Three years ago I asked them for a CETV and if I remember it was approx £8,000 which I did not take up. I've looked everywhere and for the life of me cannot find the paperwork that was sent to me back then, so have asked them for a CETV again and they are writing to me.

My question is, will I need to transfer the total amount into another pension provider or will they give it to me less any tax they think I should pay (I'm not working anyway on UC at the moment) or will I have to go through the process of finding some kind of pension account to put it in, only to take it straight out again? If I do need to do this, could someone please advise me on how I find one of these places that it would be cheap and easy to do?

Many thanks indeed for any advice.

Albermarle

CETV - Means Cash equivalent TRANSFER value, so yes you will have to open a new pension for it to be transferred into . It can be done online quite easily or by phone . I have a feeling though that some will charge you if you then straightaway take all the money out and close it again .

Perhaps more importantly , why do you want to give up a guaranteed income of £550 - £600 per year at age 65 ( probably with inflation linked rises) Swopping this for £8,000 does not sound like a very good deal , unless you are desperate for the cash.

WoodyMax

Thank you Albermarle.

Well I am on UC and was not pushed to look for work for the first 6 months after my husband's death which was last December. They are now starting to do this and I really don't want to be forced to take something I don't feel comfortable with as I still have waves of grief come over me. I think I could probably go to my doctor but not sure if I want to really, so I thought if I took it, I could live on it until my DB pension commences at the end of July next year.

Brynsam

Albermarle wrote: »

I have a feeling though that some will charge you if you then straightaway take all the money out and close it again .

A simple stakeholder pension scheme won't. It is the only type of UK registered pension scheme which is required to accept transfers in; and exit charges are not permitted. Looks like the right call for OP.

Silvertabby

If, in the case of your LGPS pension, you:

Left after April 2008,

Don't have any other LGPS benefits (with any Local Authority)

and

Your trivial commutation value is less than £10K

Then you may be able to take this as a trivial commutation under de minimas rules. If so, then you could take it all in cash from the LGPS without having to transfer it to another scheme (25% tax free, 75% taxable).

However, I stress that this is an employer discretion, so you would need to ask your LGPS if it is something they can offer (assuming that you meet all the Ts&Cs) before making any definite plans.

That said, if you live for more than 15 years in retirement, then taking the annual index linked pension could give you a better total return.

WoodyMax

Thank you Brynsam I will look into how to get a stakeholder pension.

Thanks Silvertabby - I left September 2007 so would not qualify.

Thanks so much once again for everyone's help.

Albermarle

https://www.standardlife.co.uk/c1/accounts-and-services/pensions/stakeholder-pension-features.page

https://www.cavendishonline.co.uk/stakeholder-pension

Two links for you, Good Luck .