Pension Advice Please

Silvertabby

This is under the £30K limit for trivial commutation (ie, being able to take the whole lot in cash straight from the LGPS) yet you seem to have been told that you can't do that.

There are 3 reasons for that:

1.  You have other pension benefits elsewhere which take you over the £30K limit.

2.  You have a GMP (pre 1997 service).  A trivial commutation with GMP can't be taken before GMP age, which remains 60 for women.

3.  Your LGPS is one of the few who don't offer trivial commutation.

Do you have an up to date estimate of the pension you would be giving up?  As has been mentioned before, have you considered asking if you are eligible to take these benefits on ill health grounds?

Diplodicus

Sheba42 said:

Can anyone kindly recommend another pension provider I could transfer it to, how do I do this and what I should expect to pay in charges to do this? 

AJ Bell say this:

"I can confirm our stance on defined benefit schemes below £30,000 is that we can accept them.

To transfer a defined benefit/final salary pension to your AJ Bell Youinvest SIPP, please print and complete the below SIPP transfer form:

https://www.youinvest.co.uk/sites/default/files/useful-forms/AJBYI_SIPP_transfer_in_form.pdf

Please post this form to us along with the transfer out paperwork you’ve received from your current provider. Please ensure that we receive this form at least 10 working days before the CETV expiration date, to ensure that we can instruct this in time.

As the defined benefit/final salary pension is valued at less than £30,000, I can confirm that you should not need to seek financial advice prior to the transfer.

If you have any further queries, please feel free to contact us."


There should be no charge for the transfer; you would pay a peppercorn sum to AJ Bell each month. 

Albermarle

Although you will need to watch out for this with A J Bell .

Additional charge for transferring in a pension to your SIPP and then transferring your SIPP to another provider or closing it within 12 months -  £295

Sheba42

Thank you so much for replies everyone, very much appreciated 😊

I don't know how to reply individually so apologies if I miss someone. So to answer some queries.

I do have a pension forecast, I think it was a 3k lump sum then £700 per year thereafter.
Therefore I thought taking the 19k now seems the better option, would you all agree with that ? 

I was hoping I could just cash it in but the only options on the Gov website seem to be to take the £700 per year, even though when I googled it, it said only NHS workers were denied cashing the whole pension in. 

I don't have any other pensions, this is all I have.  I don't receive any sickness benefits or anything from government as I can still walk and look after myself. 
I'm completely reliant on my husband who doesn't earn much, so if he died, I'd have no income at all. 

I wish they would just let me cash it in without all this palaver but I guess I'll have to look at the providers you have kindly suggested. Thanks for those. 

Another question I have is, after I transfer it,  could the value of it, the 19k,  go down before I have the chance to withdraw it? 

Thanks again 😊

MallyGirl

the question about forecast was:

Have you obtained a state pension forecast?

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

Albermarle

, I think it was a 3k lump sum then £700 per year thereafter.
Therefore I thought taking the 19k now seems the better option, would you all agree with that ? 

The offer looks OK but not great . The cost of providing a guaranteed income of £700 pa is more than you would normally think, assuming it will increase with inflation.

Another question I have is, after I transfer it,  could the value of it, the 19k,  go down before I have the chance to withdraw it? 

You will have the choice to leave it in the new pension in cash , where it will not go down or up .

Sheba42

Yes Mallygirl I have,  my state pension is almost standard full pension. 

Thanks Albermarle. I think £700 per year  isn't worth keeping as that's only £15 per week. 
Do you not think I'm better taking the 19k now? 

So when I transfer it, the balance will stay at 19k then, that's good to know. Would I be allowed to withdraw the money within weeks of transferring it, do you think ? 

Sheba42

Ian16527, were you able to access the DB pension money you transferred immediately ? 

Sheba42

Mallygirl. Silvertabby had asked if I knew what pension I would be giving up, so my reply about my private pension was to his question, sorry for any confusion. 

MallyGirl

Sheba42 said:

Yes Mallygirl I have,  my state pension is almost standard full pension. 

Thanks Albermarle. I think £700 per year  isn't worth keeping as that's only £15 per week. 
Do you not think I'm better taking the 19k now? 

So when I transfer it, the balance will stay at 19k then, that's good to know. Would I be allowed to withdraw the money within weeks of transferring it, do you think ? 

It depends on what you are going to do with the £19k now. If you just put it in savings its value will erode due to inflation. If you have limited life expectancy then maybe it is worth getting it out over a couple of years to pay no tax.
On the other hand if all you have is this and the state pension then £700 a year, increasing with inflation (or whatever factor they use) could be making a decent dent in the gas bill (or whatever) for the rest of your life. After 20 years (possibly less) you are likely to be better off with the pension rather than taking it out as cash.