Simple advice needed

jonesy103

I’m 62 with three DC pensions still running.

The first with legal & general is ‘frozen’ and has been for a number of years, total value is 23k.

Second is my personal pension with prudential with a current value of 147k plus I have a company pension with a current value of 72k but I do not want to touch this.

We have a number of credit card debts that I want to clear before I get to thinking seriously about retiring and our mortgage is with the one account and has a little under three years to run.

I’m considering my options at the moment and will be taking advice from both the prudential and an independent pension adviser but this it what I would like to do -

Take 25% from the l & g and the pru pensions to pay all of our debts off in full. I believe we’d have to convert to income drawdown plans in both cases but ideally I’d like to consolidate into one pension plan and still maintain contributions for at least the next three years until
I’m ready to retire.

Any thoughts ?

Marcon

Make sure you see an independent financial adviser, not just a pension adviser.

jonesy103

Thanks Marcon

Strange I know but I feel ‘safe’ with a prudential suggested pension adviser but I’ve used this site to find an IFA as as well

Albermarle

L & G have largely lost interest in pensions and you might even have trouble taking 25% tax free and the rest going into drawdown with an old pension.
So probably better to transfer the L&G pension in full to the Pru one first, and then take 25% TFC from the combined amount. Just check with the Pru first they are happy to take the transfer. They might say you have to take financial advice and/or have a chat with them first .

jonesy103

Does anybody know if I can change to drawdown, defer the pension payment and continue to make monthly contributions?

Linton

jonesy103 wrote: »

Does anybody know if I can change to drawdown, defer the pension payment and continue to make monthly contributions?

Not clear what you want to do. You say defer the pension - if you arent taking any money from it why change it to drawdown? Or do you want to take the tax free 25% but nothing else?

jonesy103

Sorry i was under the impression from both l & g and the prudential that I could only take 25% if the plans were changed to drawdown?

jonesy103

I do only want to take the 25%

msallen

There are two considerations - the legal one, and the terms of individual pensions.

Legally, as long as you only take tax free cash, you can continue to add to your pension, but as soon as you take a penny in taxable pension then you are limited to £4K a year further contributions.

As to what each individual pension's terms allow, that will depend on the individual pensions.

xylophone

Sorry i was under the impression from both l & g and the prudential that I could only take 25% if the plans were changed to drawdown?

Because the existing plans are not set up to support drawdown.

If you are happy with the Prudential, is it possible to transfer L&G to it and then ask Prudential to transfer the whole to a drawdown product?

You could then take 25% of the whole and leave the balance invested.

Or perhaps you might look to transfer both the Prudential and L&G to a new provider offering a suitable product, SIPP/PP etc.

If both were transferred, you could take your 25% and leave the balance invested.

Then when the time comes to retire from your current employment, you might transfer that pension to the product chosen.

You should investigate taking Independent Financial Advice.

https://adviserbook.co.uk/ When the menu comes up, tick "confirmed independent" and "pensions and retirement".

Albermarle

AS said above as long as long as you do not touch the remaining 75% that has been crystallised and now sits in a drawdown pot , you can still make new pension contributions subject to the normal limits ( normally maximum your earned income and no more than £40K pa.
Two points to note :
1) The money in drawdown remains invested , so you need to monitor how it is doing
2) After receiving tax free cash , you should not then substantially increase your pension contributions . This can be seen as recycling tax free cash back into the pension and there are rules about that.