Small fsavc about to mature

dc1606

Whilst working I took out a FSAVC but then made it paid up. I am approaching 75 when I have to do something with it. It is relatively small c.£14k and with Scottish Widows. I don’t need an income from it as my current work plus state pensions are adequate for our  needs. What should I do with it? I think I can take 25% in cash and the rest I think I have to take out an annuity with, but will any firms be willing to take on such a small amount? Any suggestions welcome!

dunstonh

You can transfer it to a modern pension that allows you to keep it beyond 75.

dc1606

Thanks. Is ‘modern pension’ a specific type of policy offered by firms?

xylophone

https://forums.moneysavingexpert.com/discussion/3114020/paid-up-fsavc-and-about-to-reach-65-what-do-i-do#latest

This is the same as the above from 2011?

I have to say I smiled wryly at the mention of "miserable savings rates" in a post from that date.

https://www.swanlowpark.co.uk/savings-interest-annual

Had you considered simply transferring it to a SIPP, taking the tax free lump sum and drawing the balance as best suits your tax position?

If you do not need the money, had you considered making gifts now that you might otherwise leave in your will?

xylophone

https://adviser.royallondon.com/technical-central/pensions/benefit-options/reaching-age-75-our-top-five-faqs/
might be worth a look.

dc1606

Yes, I did make that post c. 10 years ago! Hadn’t realised it would still be there!
Thanks everyone for your useful suggestions. Will investigate.

dunstonh

dc1606 said:

Thanks. Is ‘modern pension’ a specific type of policy offered by firms?

FSAVCs were abolished in 2006.   There were further pension rule updates in 2015 that impacted on the options available.  The product you have pre-dates both the 2006 changes and the 2015 changes.  So, modern would be something from after 2015.  

Financial products are just like retail products.   If you bought a TV 30 years ago, it would be a large box with a pretty naff picture and sound quality.  Compare the difference today.   You dont expect a 30 year old TV to suddenly morph into a thin widescreen TV with ultra HD and dolby atmos sound.  You buy a new one instead.     That is the same with the pension.  You need a new one that offers the latest functionality.