How much would it cost to cash in my private pension

andyaha1615

Hi there

I have a small private pension with Aviva that I took out a few years ago when my situation was drastically different to how it is now financially.

The pension is only currently worth around £6000.

I have been declared permanently disabled and unfit for any work.

I need some cash ASAP and this pension is the only option left.

I have read so many different conflicting views about the fees and how much HMRC would take if I requested my pension early so I don’t know what to believe.

Can anyone help?

Thanks.

DE_612183

I think it depends on your other income - 25% is tax free then the rest is normally at the usual standard tax rate - but it all depends on your income and tax code etc.

For 4.5k you could end up paying about £1,100 - but aviva may add on fees.

Have you asked aviva?

p00hsticks

First question - are you aged 55 or over ? As if you are not you will not be able to access it at all yet....

HappyHarry

andyaha1615 said:

Hi there

I have a small private pension with Aviva that I took out a few years ago when my situation was drastically different to how it is now financially.

The pension is only currently worth around £6000.

I have been declared permanently disabled and unfit for any work.

I need some cash ASAP and this pension is the only option left.

I have read so many different conflicting views about the fees and how much HMRC would take if I requested my pension early so I don’t know what to believe.

Can anyone help?

Thanks.

Firstly, how old are you? You will not be able to surrender this pension if you are under 55.

If you can surrender the pension, you will get 25% tax-free - this would be £1500.

The remaining £4,500 will be taxable income. Depending on your other income, it maybe that HMRC apply too much tax to this, but if so, you can claim it back.

geordiejon

as above ask aviva for a settlement figure.
on £6,000 you would get £1,500 tax free and the rest will be liable for tax at 20% that is £900
if at the end of the tax year the tax taken is too much you will get a rebate but this all depends on other income you may have.
this is based on you taking the whole ammount as a lump sum, if you wanted a regular monthly return you could get one but it will be tiny.(i had a small sum when i retired and it wasn't paying for 2 cups of coffee a month).

xylophone

Firstly, how old are you? You will not be able to surrender this pension if you are under 55.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/early-retirement-because-of-illness-sickness-or-disability

If you have a private or workplace pension, you might be able to begin taking an income and/or lump sums from your pension at any age due to ill health. The normal minimum retirement age of 55 doesn’t apply.

Marcon

p00hsticks said:

First question - are you aged 55 or over ? As if you are not you will not be able to access it at all yet....

HappyHarry said:

andyaha1615 said:

Hi there

I have a small private pension with Aviva that I took out a few years ago when my situation was drastically different to how it is now financially.

The pension is only currently worth around £6000.

I have been declared permanently disabled and unfit for any work.

I need some cash ASAP and this pension is the only option left.

I have read so many different conflicting views about the fees and how much HMRC would take if I requested my pension early so I don’t know what to believe.

Can anyone help?

Thanks.

Firstly, how old are you? You will not be able to surrender this pension if you are under 55.

OP could, if they are too ill to work again. Ill health retirement has no minimum age. Definitely one to discuss direct with Aviva to see if OP meets the qualifying criteria.

andyaha1615

I am under 55 but have been advised that my circumstances allow for it to be released.

I have just sent Aviva a detailed email describing my circumstances.

Once I have a response I will feedback what happens.

Thank you all for your advice.

mark55man

good luck - I hope it doesn't take too long to come through and that you are able to use the money to make life a bit easier for yourself.

Can I suggest just asking a general query about your situation on the benefit boards about what you may be entitled to, or more specifically whether having the lump sum may start denying you benefits.  

andyaha1615

Hi there.

I’ve heard back from AVIVA already.

I am eligible to receive 25% of my pension tax free and the rest is taxable income which I can take as a whole or as a monthly income.

I just need my doctor to sign a form confirming my status and then the pension will be released.

There are no fees and the 75% will be subject to normal tax.

Thought you guys would like to know.

Its a load off my mind.

MallyGirl

Thank you for coming back with an update. It sounds like you can get what you hoped for. I wish you the best of luck.