Pensions

Vladdy3

I took serious ill health retirement and not knowing much about pensions opted to take the works pension, I was told if I drop out of it I cannot rejoin, now I am wondering if it was the right option and if not can I change it and put the money elsewhere. It is a good pension but I need to move to a suitable bungalow and they have refused to allow me to take a lump sum so I can do this, I used the 25% tax free money to settle the mortgage on the property I am presently in, if I can move my pension then I would be able to get the lump sum I need to move into a bungalow or am I stuck with the option I originally took.

Thrugelmir

Would appear that you have already received the lump sum. You only get one bite of the cherry. The pension you receive will continue in payment and remain taxable. 

coyrls

If you are getting a regular income from either a Defined Benefit Pension or an annuity, no, this is not something you can change.  If you are drawing down from a Defined Contribution Pension then yes, you can transfer to another provider but reading between the lines (your post is not very clear), I don't think this is what you are doing.

Albermarle

You might find that if your annual income from the pension is a good amount , you might be able to get a loan. 
Obviously you would have to be careful that you could afford the repayments and still have enough to live on. You will get the state pension at some point presumably ?

xylophone

Will the sale of the current property not cover the purchase of a bungalow/ground floor flat?

Vladdy3

coyrls said:

If you are getting a regular income from either a Defined Benefit Pension or an annuity, no, this is not something you can change.  If you are drawing down from a Defined Contribution Pension then yes, you can transfer to another provider but reading between the lines (your post is not very clear), I don't think this is what you are doing.

I will try and make it more clear (I don't know much about pensions) I elected to take the works pension as I knew nothing about it other than the pension scheme is really good and is an annuity pension, then I heard people after moved their pension after discussing things with an Independent Financial Adviser (IFA), I did talk with an IFA but did not like what I was seeing, he was looking around the top corners of the room etc in my opinion for a video camera as if he did not want to be seen or heard what he was telling me, I instantly thought he was a scam artist and my money was at risk with him so I decided to play safe and keep it with the company, since then a couple of friends chose to move their money and are doing a lot better, I know there are risks involved which was another reason for me taking the  works pension, I don't like the thought that it could all go wrong, I will have enough to live on but not to purchase a property by my son, I asked for some money out of my pension but they refused, I finished work on serious ill health grounds (a multiple fractured back) which is why I need a bungalow which cost more than a house.

Thank you for your reply, I appreciate it so thought I would make my question more detailed just in case you could offer some advice.

Notepad_Phil

Vladdy3 said:

I will try and make it more clear (I don't know much about pensions) I elected to take the works pension as I knew nothing about it other than the pension scheme is really good and is an annuity pension, 

If it is an annuity then unfortunately you cannot change it now.

Vladdy3 said:

I did talk with an IFA but did not like what I was seeing, he was looking around the top corners of the room etc in my opinion for a video camera as if he did not want to be seen or heard what he was telling me, I instantly thought he was a scam artist and my money was at risk with him so I decided to play safe and keep it with the company, since then a couple of friends chose to move their money and are doing a lot better, I know there are risks involved which was another reason for me taking the  works pension, I don't like the thought that it could all go wrong

Doesn't change anything, but how do your friends know that they are doing a lot better? I'm not saying that this is happening, but investment reports can always be falsified - this is how some scammers can manage to get people to bite into their scheme for a few hundred quid and then manage to get them to fund additional amounts until they get to tens of thousands of pounds in the scam. It does sound to me that you made the right initial decision given what seems to be your low appetite for risk, and it is unfortunate that this change in circumstance has happened and means that you are regretting it.

Albermarle

As above , on the positive side you have a guaranteed income for life , probably increasing with inflation, so you most likely made the right decision about your pension.
Your current need for a lump sum is a separate issue , that the pension can not solve. 

DairyQueen

It sounds like you either:
a) Bought an annuity with a DC scheme
or
b) Put a DB scheme into payment.

Both options allow an upfront tax-free lump sum plus a lifelong annual income. DB schemes are excellent value and it is rarely the best thing to transfer-out. It sounds like you need the guaranteed income to live-on, that you are risk averse, and that you do not have the knowledge to self-manage (and financial managers require payment). On the small amount of info provided it sounds like you made the best decision.

Taking the 25% tax-free cash is a one-off benefit. The decision you made cannot be reversed and, even if you had transferred and taken the 25%, you would not now be able to take another  large chunk of cash without incurring tax. It would be treated as income during the tax year it was withdrawn.

The vast majority of people are not sufficiently financially-savvy to appreciate what constitutes 'doing better' pensions-wise. I doubt that your friends fully appreciate the benefit that they have foregone. Problem is that people view a large sum against an annual income and are dazzled by the former. I suspect that they will live to regret their decisions more than you are temporarily regretting your's.

On a practical note...

Had you considered a ground floor flat? This would be a practical solution and may be available for less than an equivalent-sized bungalow.

Vladdy3

Notepad_Phil said:

Vladdy3 said:

I will try and make it more clear (I don't know much about pensions) I elected to take the works pension as I knew nothing about it other than the pension scheme is really good and is an annuity pension, 

If it is an annuity then unfortunately you cannot change it now.

Vladdy3 said:

I did talk with an IFA but did not like what I was seeing, he was looking around the top corners of the room etc in my opinion for a video camera as if he did not want to be seen or heard what he was telling me, I instantly thought he was a scam artist and my money was at risk with him so I decided to play safe and keep it with the company, since then a couple of friends chose to move their money and are doing a lot better, I know there are risks involved which was another reason for me taking the  works pension, I don't like the thought that it could all go wrong

Doesn't change anything, but how do your friends know that they are doing a lot better? I'm not saying that this is happening, but investment reports can always be falsified - this is how some scammers can manage to get people to bite into their scheme for a few hundred quid and then manage to get them to fund additional amounts until they get to tens of thousands of pounds in the scam. It does sound to me that you made the right initial decision given what seems to be your low appetite for risk, and it is unfortunate that this change in circumstance has happened and means that you are regretting it.

DairyQueen said:

It sounds like you either:
a) Bought an annuity with a DC scheme
or
b) Put a DB scheme into payment.

Both options allow an upfront tax-free lump sum plus a lifelong annual income. DB schemes are excellent value and it is rarely the best thing to transfer-out. It sounds like you need the guaranteed income to live-on, that you are risk averse, and that you do not have the knowledge to self-manage (and financial managers require payment). On the small amount of info provided it sounds like you made the best decision.

Taking the 25% tax-free cash is a one-off benefit. The decision you made cannot be reversed and, even if you had transferred and taken the 25%, you would not now be able to take another  large chunk of cash without incurring tax. It would be treated as income during the tax year it was withdrawn.

The vast majority of people are not sufficiently financially-savvy to appreciate what constitutes 'doing better' pensions-wise. I doubt that your friends fully appreciate the benefit that they have foregone. Problem is that people view a large sum against an annual income and are dazzled by the former. I suspect that they will live to regret their decisions more than you are temporarily regretting your's.

On a practical note...

Had you considered a ground floor flat? This would be a practical solution and may be available for less than an equivalent-sized bungalow.

Hekifump

Hi. I'm 55 in January and will be looking to take my 25% tax free lump sum from my Defined benefit pension. The Pension provider won't allow me to do this & keep my pension, so I will be looking to put this and other pensions I have in a drawdown pension option. 
My question is: Have I got to wait until I'm 55 to transfer into a drawdown pension or can I do it now, but not drawdown until I'm 55?
Thanks in advance.