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Small pension pots advice

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VegastareVegastare Forumite
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While I have a small NHS pension - I also have several small pension pots - which total under £30,000.  There are 4.  I learnt more talking to Aegon call agent than the discussion with Pension Advisory Service - who had me lost with the terms they used.  I also went to a pension advisor reg with FCA who was recommended to me  - some  10 mths later and several promised phone calls has not got back to me - I concluded that my sum was too small for them to make on.  This has left me frustrated and worse I am tending to bury my head in the sand over this.   Recently most of these different small pensions have sent letters out and I am again wondering what is best.
One amount is over £14,000 so I believe I cannot take that - plus it is a group pension ( a company I left years ago) and PAS said they were not able to discuss it!  One is also a SIPP  and Aegon seemed to think I might not be able to take that either as small pot.
The other 3 - are all under £9000....one is just £300.

Am I right that one can access up to 3 small pension pots - or is this not correct
Can I simply phone the company and ask to take one of these - or do I have to use a third party.
I simply have little idea where to get advice from.
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  • edited 2 July at 6:35PM
    DoxDox Forumite
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    edited 2 July at 6:35PM
    Assuming you are aged at least 55, you can take up to three personal pension pots with a value of no more than £10,000 each. There is no limit on the number of 'small pots' you can take from occupational schemes.

    Try this for what I hope might be a clearer explanation, albeit still quite lengthy and, inevitably, with quite a bit of jargon: https://www.litrg.org.uk/tax-guides/pensioners/how-do-i-cash-my-small-pension-trivial-commutation

    If you've not yet done so, perhaps a free appointment with PensionWise might help: https://www.pensionwise.gov.uk
  • edited 2 July at 6:54PM
    DandytfDandytf Forumite
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    edited 2 July at 6:54PM
    @Dox
    thanks going to contact pensionwise in 2.5 years approx. From 50.
    OP hope you find sensible advice, my pensions include one 300 pounds pot and one medium pot, and one existing workplace one since 2015 -hope to double up contributions during 2021, make an attempt during 15 years of mortgage.
    sc dmp 2012 13k Dec 2019 11140 paid 80% approx.-Next Update Early Jan 2021
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  • VegastareVegastare Forumite
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    I will try Pensionwise - I am 63. 
    I will also take time to look through your links.  
    May I ask another question which am not sure of  - pot with £14 000 is an old scheme that was closed when it moved to another scheme - but it is a group scheme and defined - which I understand would not be able to take it is this that I was told they could not advise me on at Pension Advisory.....but when I get nearer pension age how do I get to take it....
  • xylophonexylophone Forumite
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    https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf

    May I ask another question which am not sure of  - pot with £14 000 is an old scheme that was closed when it moved to another scheme - but it is a group scheme and defined - 

    Do you mean Defined Contribution or Defined Benefit?

    Have you contacted the Administrator of the Scheme to enquire about how and when benefits may be taken?

  • VegastareVegastare Forumite
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    xylophone said:
    https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf

    May I ask another question which am not sure of  - pot with £14 000 is an old scheme that was closed when it moved to another scheme - but it is a group scheme and defined - 

    Do you mean Defined Contribution or Defined Benefit?

    Have you contacted the Administrator of the Scheme to enquire about how and when benefits may be taken?

    I have no idea who the administrator is....I left 20 years ago, about 2 years later I was sent a pack saying they had closed it down as all had moved to a new scheme ( I remember I had to go into our main post office as the company had not paid enough postage)  The only thing I receive is a yearly statement from Ageon and I could have taken it age 60 as I can with all but  one which is a SIPP and is 65 years of age which is another small pot.  Having just looked at the two defined I assume it is a Defined Contribution if this helps....thank you for all advice.
  • AlbermarleAlbermarle Forumite
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    All defined contribution ( DC) pensions can be taken at 55 ( if necessary ). The 'retirement age' mentioned in the paperwork is just an arbitrary figure that you can change .
    However it is still not clear from what you say if you are absolutely sure that all the pensions are DC .
    Maybe the older one is a Defined Benefit scheme ( DB) which are totally different) 
    https://www.moneysavingexpert.com/savings/discount-pensions/#need-9
  • xylophonexylophone Forumite
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    Have you contacted Aegon?
    What information is on the annual statement?
    Have you obtained a State Pension Forecast?  
    https://www.gov.uk/check-state-pension
  • edited 3 July at 8:10PM
    VegastareVegastare Forumite
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    edited 3 July at 8:10PM
    Albermarle
    It is a GPP  which is defined contribution I think!!!  It just states Group Personal Pension Plan on recent letter.  It is an old plan and dates back to late 80's  There is also a Uncrystallized Pension for a few thousand .  Plus another that is also with Aegon.  These last 2 have about £3000 in total.
    Xylophone
    I spoke with Aegon after I had no comeback from the FA I went to see (whom I never heard from - despite my phoning etc)  Aegon also gave me the name of the company two of the pension were set up with and and I passed the name to the FA I had seen.
    I had a State Pension Forecast prior to visiting the FA so just under 2 years ago.building etc
    I will have to speak to Aegon again....but last time I spoke with them it was difficult because it seems there are different pensions dealt with by different departments and the advisor was not clear on some aspects of the plans.  But the guy was very understanding.
    I need answers really from Aegon as to whether I should just draw the  3 pots or can I lump all the Aegon pots together and buy an annuity.  Is it worth it for about £17,000 plus.  I apologies for not being clear on all this - but I was left feeling my small amount was not worth managing from the FA I saw and I am really hesitant to try and see someone else.   I have one other old pension that is with another company and I know I can draw that as a lump sum and pay 25% tax.  But I was clearly told that I can only draw 3 !!  is this true and does it have to be all at once or maybe a couple one year etc.
  • jamesdjamesd Forumite
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    Vegastare said:
    I also have several small pension pots - which total under £30,000.  There are 4. ... One amount is over £14,000 so I believe I cannot take that - plus it is a group pension ( a company I left years ago) and PAS said they were not able to discuss it!  One is also a SIPP  and Aegon seemed to think I might not be able to take that either as small pot. ... The other 3 - are all under £9000....one is just £300.

    Am I right that one can access up to 3 small pension pots - or is this not correct

    The "small pot rule" allows taking all of up to three pots per lifetime worth up to £10,000 each. It's probably not a rule you need to use but if you do need it the easiest way I know is to transfer all four to Hargreaves Lansdown. If you tell them that you want to use the small pot rule they will move up to £10,000 into a pot and pay it to you using the small pot rule. Since the total value is under £30,000 you could get it all out this way.

    But the small pot rule isn't often needed. A couple of cases where it's useful are:
    1. if the value of all pots exceeds the over a million Pound pension lifetime allowance. The small pot rule doesn't count for this so there's a lower tax charge and extra tax free lump sum benefit.
    2. if a person is still working and wants to make pension contributions of more than £4,000 a year, because the small pot rule doesn't trigger the limit.

    Does either of those apply to you? If not, just forget about the small pot rule and use UFPLS or flexi-access drawdown.

    Because you're 63 it's not likely to be best for you to use the money to buy an annuity. This is because if you defer claiming the state pension it's increased by 5.8% for each year you wait and this is increased with inflation each year. That's around twice what a similar annuity would pay for the same money if your health is normal. While deferring you replace the state pension of say £175.20 a week by taking a UFPLS payment from the pension pot of £9110. After two and a bit years of that you claim your state pension.

  • xylophonexylophone Forumite
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    2. if a person is still working and wants to make pension contributions of more than £4,000 a year, because the small pot rule doesn't trigger the limit.

    Yes.  

    Note too that if a person takes income from a DC pension and triggers the MPAA in respect of further contributions to any other DC pension, it would not be triggered in respect of any DB pension to which he wished to contribute.

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

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