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PPF

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I'm nearly 56 and tempted to pull my 25% out of the PPF.   I'm unmarried and my partner would only get 50% of my pension if anything happened to me.
Would I be doing the right thing or am I bonkers?

Comments

  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Post of the Month
    I'm nearly 56 and tempted to pull my 25% out of the PPF.   I'm unmarried and my partner would only get 50% of my pension if anything happened to me.
    Would I be doing the right thing or am I bonkers?
    The fact that you are unmarried doesn't tell us much about how you plan to fund the next forty years of your life.  Don't you want the income? And 50% of something is still something.
  • Brynsam
    Brynsam Posts: 3,643 Forumite
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    If you take a tax free lump sum, your partner's pension would be 50% of a lower amount. In the PPF the partner's pension is based on the pension you are receiving at the time of your death (NOT the pension you would have been receiving had you not taken a tax free lump sum).
  • westv
    westv Posts: 6,441 Forumite
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    edited 31 July 2020 at 5:30PM
    Are you sure you can get 25%. Mine has no lump sum.
    Edit: also,you can't "pull out" the 25%. It's only available once the pension is in payment.
  • garmeg
    garmeg Posts: 771 Forumite
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    edited 31 July 2020 at 6:25PM
    Brynsam said:
    If you take a tax free lump sum, your partner's pension would be 50% of a lower amount. In the PPF the partner's pension is based on the pension you are receiving at the time of your death (NOT the pension you would have been receiving had you not taken a tax free lump sum).
    For a DB pension, the spouse pension is usually unaffected by the taking of any PCLS.

    Is the PPF different to the usual convention?
  • Marcon
    Marcon Posts: 14,278 Forumite
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    edited 31 July 2020 at 8:08PM
    garmeg said:
    Brynsam said:
    If you take a tax free lump sum, your partner's pension would be 50% of a lower amount. In the PPF the partner's pension is based on the pension you are receiving at the time of your death (NOT the pension you would have been receiving had you not taken a tax free lump sum).
    For a DB pension, the spouse pension is usually unaffected by the taking of any PCLS.

    Is the PPF different to the usual convention?
    Yes. As Brynsam has correctly pointed out, taking tax free cash reduces the spouse's pension.
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • Brynsam
    Brynsam Posts: 3,643 Forumite
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    garmeg said:
    Brynsam said:
    If you take a tax free lump sum, your partner's pension would be 50% of a lower amount. In the PPF the partner's pension is based on the pension you are receiving at the time of your death (NOT the pension you would have been receiving had you not taken a tax free lump sum).
    For a DB pension, the spouse pension is usually unaffected by the taking of any PCLS.

    Is the PPF different to the usual convention?
    Yes. The PPF pays 50% of the actual pension being paid at the time of death. This can make quite a difference, especially if the original scheme paid a 2/3rds spouse's pension AND ignored any tax free cash when calculating the spouse's benefit.
  • garmeg
    garmeg Posts: 771 Forumite
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    Brynsam said:
    garmeg said:
    Brynsam said:
    If you take a tax free lump sum, your partner's pension would be 50% of a lower amount. In the PPF the partner's pension is based on the pension you are receiving at the time of your death (NOT the pension you would have been receiving had you not taken a tax free lump sum).
    For a DB pension, the spouse pension is usually unaffected by the taking of any PCLS.

    Is the PPF different to the usual convention?
    Yes. The PPF pays 50% of the actual pension being paid at the time of death. This can make quite a difference, especially if the original scheme paid a 2/3rds spouse's pension AND ignored any tax free cash when calculating the spouse's benefit.
    That's a bit rubbish. Better than the alternative I suppose ...
  • Brynsam
    Brynsam Posts: 3,643 Forumite
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    garmeg said:
    Brynsam said:
    garmeg said:
    Brynsam said:
    If you take a tax free lump sum, your partner's pension would be 50% of a lower amount. In the PPF the partner's pension is based on the pension you are receiving at the time of your death (NOT the pension you would have been receiving had you not taken a tax free lump sum).
    For a DB pension, the spouse pension is usually unaffected by the taking of any PCLS.

    Is the PPF different to the usual convention?
    Yes. The PPF pays 50% of the actual pension being paid at the time of death. This can make quite a difference, especially if the original scheme paid a 2/3rds spouse's pension AND ignored any tax free cash when calculating the spouse's benefit.
    That's a bit rubbish. Better than the alternative I suppose ...
    It's something to be aware of and take into account when deciding whether to take a tax free lump sum.
  • ChileanRed
    ChileanRed Posts: 19 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Thanks for your input folks. I'm not planning on spending the 25% or the weekly/monthly payment I would receive. Was just going to stick in a savings account.
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