Just discovered I have an old pension - not sure what to do now?

depressedandworried

Hi there,

I have searched through the forums and can't seem to find advice that fits my question?

I was 60 in June this year and I was contacted in July/Aug via the DWP because Phoenix Life (who purchased Britannic Assurance) wanted to get in touch. I had taken a pension out many years ago (in 1990) and this was frozen and I had forgotten all about it!

I was able to find (thank goodness) my original documentation/policy Nmbr etc and gave them my new address and confirmation that this was indeed an old pension I started. They have written back and said there is: Total values: £6408.14 with Personal Rights: £6408.14

I have been ill for some years and I am on Universal Credit. Unfortunately, after Christmas I am going to be homeless as I have been staying with friends and it is time for me to move on. I have no idea what to do next and so I was hoping that this had arrived as a piece of 'good luck' for me.

I would like to be able to draw-down the money but I have no experience with these sorts of things and have no idea where to start? I have no other pension.

If anyone could help me help me with this advice I would be sincerely grateful. Perhaps if I can access these funds, I will at least be able to rent somewhere for a few months. The pension (so it says on my old policy) matured at the age of 60 so I am guessing that is why they tried to find me?

Thank you for any advice and if you need any more info from me, please ask. 

molerat

Total values: £6408.14 with Personal Rights: £6408.14

Do you mean "Protected Rights"

As this is an old pension did they give you any information around what you can do with it ? There may be limited options without transferring it elsewhere.

More information is needed.

depressedandworried

molerat said:

Total values: £6408.14 with Personal Rights: £6408.14

Do you mean "Protected Rights"

As this is an old pension did they give you any information around what you can do with it ? There may be limited options without transferring it elsewhere.

More information is needed.

Hi, no it deff says 'Personal' but in the 2 columns after it does say 'Pre-1997 Former Prot Rights (£)' and then 'Post 1997 Former Prot Rights (£)' but there are no number in these 2 fields?

depressedandworried

I will get some scans in the morning to supply more info on what it says exactly

Thanks, appreciate your reply

xylophone

"Protected rights" refers to  the National Insurance rebate paid into a policy as a result of contracting out of State Earnings Related Pension.

There were certain restrictions placed on taking benefits from protected rights but these were abolished in 2012 so that people were left with ordinary rights in a Defined Contribution Pension Scheme.

If "personal rights" does not mean "protected rights or "former protected rights" then presumably it simply represents your contributions and growth on those contributions over the last  thirty years or so.

You mention UC but are you employed and/or currently contributing to a pension scheme?

As you are over age 55 you would be eligible to take benefits from this pension - you would be able to take 25% tax free Pension Commencement Lump Sum while the balance would be taxable as income in the tax year it was taken.

The amount in question would fit within the "small pot" rules should triggering the Money Purchase Annual Allowance be a matter of concern for you.

If you have no taxable income at the moment, then as the sum in question is under your personal allowance, then ultimately it would all be tax free but you could find yourself having to make a tax reclaim as the provider would deduct tax from the 75% before paying out the pension.

What effect would taking the whole sum have on your state benefit?

https://www.gov.uk/government/publications/pension-freedoms-and-dwp-benefits/pension-freedoms-and-dwp-benefits

You can book an appointment with Pension Wise for guidance on your pension options.

https://www.citizensadvice.org.uk/debt-and-money/pensions/get-ready-for-your-pension-wise-appointment/

xylophone

I will at least be able to rent somewhere for a few months. 

Had you looked into  local authority/housing association rented property for over 60's?

Example

https://www.anchor.org.uk/our-properties/properties-to-rent

depressedandworried

xylophone said:

I will at least be able to rent somewhere for a few months. 

Thank you SO much for your assistance, this makes happy reading! ::smile:

I am currently looking into getting assistance with accommodation but, if I had a little 'something' (anything really) to help start me off on my new journey into 2024, then this will help no end 🙏🏻

As promised last night, here are the scans of my documentation (edited to remove Personal Details) so I hope this is enough info for me to then move to the next step.

PS: Yes, I have been on Universal Credit for 2 years due to illness.

Thank you again x

Thanks for any help you can give me

xylophone

You have been advised by the provider that as you are over 55, you may "retire" (ie take benefits) immediately.

It could be advisable to  book an appointment with Pension Wise before contacting Phoenix - you are likely to be asked if you have done this, particularly as ( I assume) you do not have a Financial Adviser.

Do you need to check on the effect on your DWP benefits? You could post on the Benefits Board for comment if it would be helpful.

And if necessary, see https://www.gov.uk/guidance/claim-a-tax-refund-when-youve-taken-a-small-pension-lump-sum-p53#:~:text=You'll need to use,tax on these lump sums

Good luck with the house move.

And have you obtained a state pension forecast?

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

FIREDreamer

It’s a shame that it has spent over 30 years in the deposit fund which has probably returned zero for most of the last 15 years. If it had been in the managed fund it would probably be worth nearer £20,000 or even more. ☹️

SVaz

Thats all well and good but would have resulted in OP losing all benefits.
 £6400 is enough to furnish a 1 bed HA flat with some left over for emergencies.  Assuming he/she can get housed,  being over 55 should qualify for retirement accomodation.
It’s well under the limit to affect benefits.  It may even escape tax, I don’t imagine UC is very generous to a single adult. 

depressedandworried

SVaz said:

Thats all well and good but would have resulted in OP losing all benefits.
 £6400 is enough to furnish a 1 bed HA flat with some left over for emergencies.  Assuming he/she can get housed,  being over 55 should qualify for retirement accomodation.
It’s well under the limit to affect benefits.  It may even escape tax, I don’t imagine UC is very generous to a single adult. 

Thank you for that response, very much appreciated you are right, it's no small amount to me right now.

I have booked my tel. appointment for early Jan with PensionWise so looking fwd to that. Do they actually help with how to draw-down the funds?

Thanks