Pension fund and transfer plan values. What's the difference?

dleafy

Hi All,
I'm rapidly approaching 55 and have been contacted by the 4 different company's that I have pensions with. 
Whilst I (probably) have no plans to cash in any of them, I'm a little confused by some of the terminology. The fund value seems less than the transfer (or even plan) value, with the latter 2 being higher.
Supposing, I wanted to cash the entire lot in when I turn 55, would I get the transfer value? I'm aware that I'd only get 25% tax free.

Thanks in advance.

Dox

Fund and plan normally mean the same thing. If the fund/plan and transfer value are different, you'd expect the transfer value to be the lower figure. Are you quite sure you've got things the right way round?

dunstonh

The fund value seems less than the transfer (or even plan) value, with the latter 2 being higher.

That usually only applies to With Profits funds.    The final bonus accrued to date is rarely included in the current value but is included in the transfer value.

Supposing, I wanted to cash the entire lot in when I turn 55, would I get the transfer value?

You get the transfer value minus tax.

green_man

As dunstonh says, the fund value, for with profits funds,  usually shows the guaranteed fund value, this consists of all the yearly bonuses accrued so far but doesn’t show any final bonus value.  The transfer value will include your portion of any excess funds that can be apportioned to your plan at the time of the valuation, these excess funds will normally form the final bonus, they are not guaranteed, so your transfer value will not be guaranteed but should not typically fall below your fund value (unless a Market value reduction figure applies on your plan).

dleafy

Would I be right in saying that the fund value is the amount that has been paid in, and the transfer value is higher, because it contains some of the bonuses you would have received if you'd stayed the term?

dunstonh

dleafy said:

Would I be right in saying that the fund value is the amount that has been paid in, and the transfer value is higher, because it contains some of the bonuses you would have received if you'd stayed the term?

no

dleafy

If, when cashing in, I get the transfer value (less tax|)....I'm happy with that

Tealblue

dleafy said:

Would I be right in saying that the fund value is the amount that has been paid in, and the transfer value is higher, because it contains some of the bonuses you would have received if you'd stayed the term?

No. The fund value reflects investment returns/losses (depending on the type of fund you are in) minus fees.

dleafy

If you cash it all in, what percentage of tax do you pay after the 25% tax free?

wjr4

dleafy said:

If you cash it all in, what percentage of tax do you pay after the 25% tax free?

Whatever income tax bracket you are. 

dleafy

I’m PAYE. Earning £30,000, So would I pay 20%?