Special Last Contribution

civvycivvy

I have a small pension maturing this year. I've been paying in since 1979 and have not missed a premium. I've decided how I wish my pension to be paid, but my provider in all their correspondence, mention that I can pay a "Special Last Contribution". This amounts to 11 months worth of premiums. When speaking to a representative on the phone today, I was told that this needn't be paid and that if this was not paid then no penalties will be incurred. Has anybody else come across this? I had a similar situation a few years ago when paying off my mortgage (yes, it can be done). After suffering the leaps and bounds of the mortgage rates through the 70's and 80's, my provider asked for an administration fee after me not missing a payment for all those years. They waivered the fee after I kicked off about it. 

Albermarle

I have a small pension maturing this year. I've been paying in since 1979 and have not missed a premium

There are many different types of pension, and a 1979 one could be anything, especially as you mention 'premium' rather than contribution.

To get a useful answer, you will have to give details of the pension .

Linton

What benefit does the "Special Last Contribution" provide.  There must be one.  Without knowing that I cant see how an aswer can be given.

civvycivvy

Albermarle said:

I have a small pension maturing this year. I've been paying in since 1979 and have not missed a premium

There are many different types of pension, and a 1979 one could be anything, especially as you mention 'premium' rather than contribution.

To get a useful answer, you will have to give details of the pension .

It is a Defined Contribution (money purchase) pension. My mistake with the terminology, "premium" should read "contribution." 

xylophone

I have a small pension maturing this year. I've been paying in since 1979 and have not missed a premium.

It is a Defined Contribution (money purchase) pension. My mistake with the terminology, "premium" should read "contribution." 

Are you sure that it is not a Retirement Annuity Contract?

https://www.litrg.org.uk/tax-guides/tax-basics/do-i-have-join-pension-scheme

If you took out a personal pension before 1 July 1988, it would have been called a retirement annuity policy. Quite often, these were linked to insurance policies and any payments to the insurance policies were also treated as being pension payments.

Retirement annuity policies are able to pay out larger tax-free lump sums than personal pensions.

Payments to retirement annuity policies are made gross, without any tax taken off. You may still be entitled to tax relief, but you need to get the tax relief through your PAYE coding notice or your Self Assessment tax return.

Is the special last contribution related to some advantage conferred by the RAC arrangement?