Taking pension lump sum at 55

xylophone

Do you have a scheme pension booklet?
Have you obtained a quote from the administrator for taking the age 60 pension at age 55?

Can I transfer the value of my pension at 55 put it into an annuity take 25% and then take bigger monthly payments across say ten years.

Do you mean you want to transfer out your age 60 DB pension to a DC scheme?

Gig1968

I am going to contact them on Monday they are called Rpmi.
I'm thinking of asking them for a cash value of the whole pension pot and taking it one one go.
I have used a defined benefit tool on the internet and worked out the value at around about £160k.
I would get the first 25% tax free leaving me around £120k to pay tax on.
I only get £5k in benefits so that would leave me with a further £7k tax allowance to use 
So my tax bill would be 120 x 40% = 48k leaving me with £72k however adding the remaining tax allowance back I woukd have £79k 
So tax free £40k
After tax £79k
Total £119 k
Does that sound pkausible

Silvertabby

Railways pensions are complex.  Seems some may be transferred to DC schemes, but some may only be transferred to another DB scheme.

If you can transfer to a DC scheme, then getting the CETV is just the start.  As the notional value of your pension benefits is over £30K, you will have to take - and pay for - independant financial advice.

Good luck with finding an IFA who thinks that your plan is a good idea! 

xylophone

You cannot take your DB pension as above.
You would need to transfer to a DC pension - by law you would be required to take the advice of a Pension Transfer Specialist. This will not be cheap.

https://www.royallondon.com/media/good-with-your-money-guides/five-good-reasons-to-transfer-out-of-your-company-pension-and-five-good-reasons-not-to/

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/pension-transfers-conversions/
Why would you want to take the whole pension in a lump sum and pay tax unnecessarily?

Gig1968

Yes I think that's what I meant I was confusing myself I looked at standard Life as an example . My scheme would transfer it to them and then they would sort it out for me. After I had got advice from a financial advisor first. What sort of cost would I be looking at them. I note the comment before yours about trying to find an advisor who agrees with my thought are they able to disagree with my thoughts 

xylophone

Railways pensions are complex.

The OP mentioned RPMI but he doesn't have a Railway pension - he is part of this I think.

https://www.rpmi.co.uk/about/esps-members

xylophone

I note the comment before yours about trying to find an advisor who agrees with my thought are they able to disagree with my thoughts 

Yes, the PTS could recommend against a transfer but this would not necessarily prevent a transfer out.

The legal requirement is that you obtain the regulated advice, not that you follow it.

However, some (most?) schemes will not accept a transfer against advice - example
https://www.fidelity.co.uk/approaching-retirement/transferring-final-salary-pensions/

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/transfer-pension-scheme/

https://forums.moneysavingexpert.com/discussion/6038905/who-will-accept-a-db-to-sipp-transfer-from-insistent-client

AnotherJoe

Gig1968 said:

I am going to contact them on Monday they are called Rpmi.
I'm thinking of asking them for a cash value of the whole pension pot and taking it one one go.
I have used a defined benefit tool on the internet and worked out the value at around about £160k.
I would get the first 25% tax free leaving me around £120k to pay tax on.
I only get £5k in benefits so that would leave me with a further £7k tax allowance to use 
So my tax bill would be 120 x 40% = 48k leaving me with £72k however adding the remaining tax allowance back I woukd have £79k 
So tax free £40k
After tax £79k
Total £119 k
Does that sound pkausible

No on several levels.

-Expect to lose another £10k as an IFA fee to do the transfer, if you can even find anyone who will say "no". (because everyone would say no,  as its financial suicide but IFAs these days dont even like to say "no" in case they still get the blame for you going ahead, so they just wont do it at all)

- Why do it in one go when over 2-3 years you could be under the 40 tax limit and save paying an extra 20% tax?

- Are you unable to get any kind of job to tide you over? If so your benefits seem very low.vMaybe the benefits board can help.

Gig1968

I have severe epilepsy and haven't worked for many years.  My benefits are the correct one for me ESA at £5.5k a year. No employer woukd ever take me on as I'm too much of a risk.  To be fair having spent three out of the last twelve months in hospital and having no wife or  kids. I wrongly though having the money in my bank if anything happened to me at least that money would end up with her. So I thankyou for your help and kind comments I have now binned that idea . So I have investigated a new plan b. I wandered if this was feasible. 
Is the following the route I need to go.
Contact my pension administrator Rpmi discuss it with get them to provide me with a value.
Discuss with an independent financial advisor cost  1% I have read on internet  or £10k as mentioned above not sure 
Pension provided transfers it to someone like standard Life.
Followed discussion with IFA I decide to take it over 5 years and the immediate 25% tax free.
Is this right or have I made a mess if it again.
What is the sort of timescale for this.

AnotherJoe

You can try but the issue is even before the virus and the crashing of stock markets, most IFAs were stopping work on doing transfers (there are dozens of threads and thousands of posts here about why, but trust me they were).

If you find someone to do a transfer its not going to be £1k and if it was I' suspect fraud.

The timescale even in normal times is easily 3+ months.

These days, i reckon you could double that.

You need an  IFA with a particular qualification. Hopefully someone will post here on what it is / how to search for that i camt recall.

I would double check on the benefits board re what you are getting anyway.

Good luck.