Private pension

Simmy54

Hi, could someone tell me about a private pension I took out circa 1988 with Canada Life as a teenager. I completely forgot about this policy as I only made probably a few payments of very little cash and stopped paying. Turns out I was getting a yearly statement sent to my parents house which they forgot to tell me about lol. Anyway it's moved to Scottish Friendly and is now has a fund value of £7000.
I'm 54 and I was wondering if I can take all of this as cash when 55?
It's a unit linked pension but I'm pretty clueless when it comes to pensions. Thanks

Brie

Likely you can take it at 55 but the question is should you?  Likely there will be 25% available tax free but you'll have to pay tax on the rest.  If you are already in a high tax bracket or close to it it may be better to wait so you don't lose out on 40%.  

There may also be implication if you are currently paying into any company pension scheme.  Some withdrawals from a pension will limit how much you can pay into other schemes tax free which may  mean taking the cash at 55 wouldn't be overly beneficial.  

It was suggested to me a year back that as I was having a low earnings year (full time employment stopped, then unemployed, then starting part time on a low wage) that was a good time to take money out of schemes as it would minimise the amount that would be taxed.  

AND I think that unit linked pensions have a value based on the stock market (happy to be corrected).  Given that the stock market is still low and recovering the fund may have a higher value in 4 or 5 years rather than in 12 months time.  But that's very hard to predict.

xylophone

If  valued at only £7000 you could consider the "small pot" withdrawal which would not trigger the MPAA in respect of any DC pension to which you  were contributing.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/taking-your-whole-pension-in-one-go#:~:text=Small pot lump sum payments,the payment is tax-free.

You could take 25% tax free - the rest would be taxed as income in the year of receipt.

Albermarle

Another possibility would be to transfer it to any current pension(s) you have, depending on the type etc.

Simmy54

Albermarle said:

Another possibility would be to transfer it to any current pension(s) you have, depending on the type etc.

Aside from this private pension I have a few other pensions.
A royal mail pension which I paid into from 1991/2000 I think it's a final salary pension paid from age 60 with a current value of annual pension of £2,800.
A Tesco pension which is now closed which I think is a DB pension of £2,417 a year.
And my current Tesco pension which is a DC pension with a pot of £31,000.
I'm not desperate for the private pension money just thought I could maybe clear a few debts etc.
I wonder if I could move this into my current pension?

xylophone

I wonder if I could move this into my current pension?

You could check with current scheme whether a transfer in would be accepted.