Two Pensions (Personal and Company Executive / Directors) 25% Cash Out + Merge

dunstonh

Thanks for all the comments. If I may just make one point before addressing the comments it is that there seems to be a recurring theme on this forum in that someone says "I want my 25% now", which generates replies of "why do you want to do that" and "don't do it".

That is because it has consequences.  It reduces tax efficiency in the long term in many cases.  It reduces available money later and if done wrong, it can cripple future planning ability.

And far too many people just take the 25% up front and stick it in a savings account which is usually completely bonkers.

It could be that there are totally valid reasons why someone would want to take the 25% (such as charitable, health, religion and such) and that not everyone wants to take it out to go raving around the world.

If it is charitable then use other money you have.  Health can play into decisions but usually continuing to work does not suggest that would be the case.  Religion has no place here.

Back to option 3 (Prior to 55 merge both plans, then take out 25% after 55). I don't think this would be suitable now because would I not be hit with the £1060 exit fee, even though it would go from one Abbey Life plan to the other? Would it not be best to merge them at 55 and then take the 25% after that? This will only incur a £150 fee.

I don't believe Abbey Life pensions support income drawdown.  

The next question is: Which should merge into which? Should the Personal plan be dominant and take in the company pension, or the other way round (if that is possible?)

If income drawdown is not supported then neither of them would be suitable.

Finally, I understand why I was advised to setup the company pension in the first place, but why was I advised to also keep the personal pension going? Why was it not possible to port the personal plan into the company plan back in 96?

Modern pensions are mostly ccount based and adapt and update as you go along.   However, back in the 90s, the products were issued in tranches.   When they wanted to make changes, software was not sophisticated enough to be coded and changed.  Indeed, a lot of the times, the software was hard coded.   So, when they wanted to make changes, they would come out with a new version of their pension.     So, if you bought the pension in different years you would often be on a different version with each.  Also, you say one contained protected rights.  That required an appropriate personal pension plan and could not go into a personal pension plan that only took ordinary rights.