Help, husband's closed work save pension and new stakeholder pension

xylophone

Another thought - he should check for any pensions he may have forgotten.

https://www.gov.uk/find-pension-contact-details

And don't forget the State Pension Forecast to help with planning.

bsmm228

Thank you to everyone who has responded. If nothing else it has made us dig out all the paperwork, check what he has and know who to contact when the time is right 👍

Albermarle

Hubby wants to reduce his hours, is this likely to have a significant impact on his final pension? Should he consider releasing his Deferred Benefits Pension to make up the shortfall in salary?

Normally for a DC /stakeholder scheme the contributions from employee and employer are a % of salary . So if you reduce salary by working part time then naturally less money will be going into the pension each month . The employee could choose to increase their % contributions if they want .
However in his case I am not sure how it would affect the enhanced employer contributions , probably he would need to speak to the HR dept

If he takes the defined benefit pension whilst still working , it will be added to his employment income for tax purposes, as all pension income ( including state pension) is taxable in exactly he same way as employment income.

Still isn't going to generate a big pension as he's only got 5 years to accumulate it and both him and his employer are paying the max in.

Well it could become a pot of around £50K ? by the time he retires so better than nothing .
You are right it will not generate a big income but you will have some other options, such as :
Leave it where it is to hopefully continue to grow . There is no requirement to take it at any age .
Take out 25% tax free as a lump sum etc

xylophone

I had mentioned the possibility of taking the Pru pension but I have had

yet another thought about the effect that taking a DC pension can have on contributions to another DC pension (like the current Worksave)

The Prudential pension is presumably a DC pension.

You mention that you think the value might be very modest - if a "small pot" (£10,000 or under), he could take this ( tax free 25% Pension Commencement Lump Sum plus taxable balance) without triggering the Money Purchase Annual Allowance).

However, if the value is more than this, then taking more than the tax free PCLS from the Pru pension would trigger the MPAA - This could stymie the "enhanced contributions" being made to the Worksave pension depending on how much these are.

See https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/money-purchase-annual-allowance/

That said, reducing his hours could reduce the amount being contributed to the Worksave pension.

Taking the DB Scheme pension would not trigger MPAA but taking it early would almost certainly mean an actuarial reduction.

Your husband could seek an interview with Pensionwise in respect of his DC pensions.

https://www.pensionwise.gov.uk/en