55 in 2 weeks - need to know my best option

tritons0

hi,  i have two pensions - very small ones - one is approx £7500 value, and the other bit better £16,700 approx - best suggestion 25 tax free lump sum and leave?  i dont pay inito these pensions and havent done for many years .  we claim working tax credits so cant put money into these pots and i am only in the lowest tax band. i also have a very small nhs pension which i need to check but i only worked for 4 yrs one afternoon a week , so that will be pennies haha .  any advice greatly received - many thanks

NedS

Your best option is to leave your pensions alone, continue working and continue contributing as much as you can for your retirement.

Why would you want to take 25% now? You do not seem to be in a position where you can think about retiring yet.

xylophone

Have you obtained a State Pension Forecast?

https://www.gov.uk/check-state-pension

we claim working tax credits so cant put money into these pots and i am only in the lowest tax band. 

Surely being in receipt of WTC doesn't prevent your contributing to a pension?

https://www.entitledto.co.uk/help/tax-credit-pension-contributions

Or do you mean that contributing any more to a pension than you do through a current  workplace scheme  ( do you have such a pension?) would be too much of a strain on the budget?

 i also have a very small nhs pension which i need to check but i only worked for 4 yrs one afternoon a week ,

You have a deferred pension with the NHS? 

https://www.nhsbsa.nhs.uk/member-hub/membership-nhs-pension-scheme#:~:text=Deferred pension,into the NHS Pension Scheme

You refer to taking a PCLS from two pensions. These are Defined Contribution pensions?

 - do these schemes permit you to do this and leave the balance invested?

See https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise/explore-your-pension-options

and book an appointment to discuss?

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

Albermarle

any advice greatly received - many thanks

Study the links above and leave the pensions alone until you have a proper plan. There is absolutely no no need to do anything just because you reach 55.

howmuch4

Leave them, forget about them till ur about mid sixties. Few other savings plans for the average man yeild the returns a sipp will give you.

WYSPECIAL

tritons0 said:

  we claim working tax credits so cant put money into these pots and i am only in the lowest tax band. 

Paying into a pension will actually increase the amount of WTC you get.

jamesd

You can pay in while getting WTC.

You should avoid taking anything about because that's likely to cause them to count as savings for any means tests.

JoeCrystal

WYSPECIAL said:

tritons0 said:

  we claim working tax credits so cant put money into these pots and i am only in the lowest tax band. 

Paying into a pension will actually increase the amount of WTC you get.

I really missed WTC. It was really neat to be able to put majority of the income into pension scheme and reported much lower income to get even more WTC.

xylophone

count as savings for any means tests.

https://www.moneyhelper.org.uk/en/benefits/problems-with-benefits/how-do-savings-and-lump-sum-pay-outs-affect-benefits

How your savings affect your tax credits

For tax credits, the savings limit of £16,000 doesn’t exist. Instead, your tax credits are affected by how much income (usually interest) you receive from those savings. 

If you receive less than £300 in income from those savings, it won’t affect your tax credits.  

If you receive more than £300 in income from those savings, then £300 is deducted from your annual income, used to calculate how much tax credits you receive each year. 

You can find out more about what counts as income for tax credits in this guide on the Low Income Tax Reform Group’s website

jamesd

True, but things like housing benefit can come into play when WTC are around.

tritons0

tbh i am paying off some debt with any extra income at the moment (and theres not alot left over at all after bills paid)- to put money into the pension pot is not an option at present.  i just thought that especially the very small pension doesnt seem to be doing anything?