Pension withdrawal

galwayboy

Hi everyone,
I had pension with my first employer who I worked for between 1983-1991,  it has about £38.000 init , I was going to take money out of it to help pay of my mortgage as I can no longer work due to my MS , can anyone help me with this as I can access it from April.
Thank you 

Brynsam

You need to contact the scheme and ask them for details of the process you need to follow. You say there is 'about £38K in it' which suggests it is a defined contribution scheme, but your dates of employment suggest it might actually be a defined benefit (final salary) scheme. If it's the latter, you won't be able to take the whole lot as cash unless you transfer out to a defined contribution scheme such as a SIPP or other personal pension - and to do that, you'll need to take professional advice. See the many threads on this board about that....

Linton

It is unlikely that your 1983 pension will permit you to take the money as a lump sum - old schemes generally cannot handle the administration.   If this is the case you will need to set up a modern pension, perhaps a SIPP, and then ask them to transfer-in your old pension.

However there is a possibility, given the age of the pension, that it includes valuable benefits such as a Guaranteed Annuity Rate which would buy a much larger income than would otherwise be the case.  If your pension does have a GAR, as it is worth more than £30K  you would need to pay for advice from a suitably qualified IFA on whether a transfer losing the GAR would be in your best interest. This advice is not cheap.  If the IFA says it is not in your interest you can still transfer but your choice will be very limited.  

So first job I think is for you to find out exactly what benefits your pension offers.

Xbigman

Be aware that accessing your pension before state pension age can affect means tested benefits. You might also want to post on the benefits board to see if this could be an issue.

Darren

steve0510

I think my first move would be, approach the Administrators and ask them what is possible.  Schemes have very different rules and some can be specific to category or dates of employment,  The administrator will know what is and what is not possible.

NedS

Xbigman said:

Be aware that accessing your pension before state pension age can affect means tested benefits. You might also want to post on the benefits board to see if this could be an issue.

Darren

Good advice.

Disability benefits such as DLA/PIP are unaffected as they are not means tested

Benefits such as Universal Credit which are means tested will treat lump sum withdraws as capital (and capital over £6000 will reduce the amount of benefit received, capital over £16,000 will mean closing the claim) and any regular payments will be treated as income and deducted pound for pound from any Universal Credit.

It is your responsibility to report any pension lump sums/income to DWP in respect of any benefits you receive.