Refund of personal pension?

Sgt_Oddball

Hi. I started a new job in April 07. Part of the benefits package was a personal pension (L&G) to which my employer would match contributions of up to 5% of my salary.

However, I have recently handed my notice in and estimate the pension pot will be worth ~£2500 when I leave. Fortunately, I will be able to keep the employer's contributions to the personal pension.

In my new position I will contribute to a final salary scheme which is highly regarded.

Can I obtain a refund of my contributions to the personal pension? I have around £20k worth of other debts (personal loan plus student loan) and am tempted to use this cash to pay off some of this. I assume I would have to pay income tax on any refund.

Any opinions gratefully received!

nearlyrich

Not sure what the latest rules are but you used to be able to get back pension contributions in the first few years ( it was 5 years in the 80's) minus the tax benefit, I am nearly certain this loophole has now been closed. There are a few financial advisors who post on here and I am sure they will know exactly what the rules are...

dunstonh

Occupational pensions have a different rule to personal pensions.

This sounds like a group personal pension so it will not be refundable.

Sgt_Oddball

dunstonh, many thanks for the quick response.

It is a group personal pension. I didn't realise there was any distinction! Are there are any other restrictions on group personal pensions?

If I can't cash it in I would possibly think about transferring it into the new pension (Universities Superannuation Scheme).

Thanks

withabix

You may be entitled to a refund of YOUR contributions, but not your employer's.

It depends on how this scheme is operated.

When I left my last employer (for the second time!), I hadn't served the 2 years' service required to leave my pension in the company's money purchase scheme, so I had to either a) transfer MY + EMPLOYER'S contributions (plus growth) to my new employer's scheme or b) take a refund of MY contributions plus growth.

As my new employer doesn't accept transfers in, I had to take a refund.

Strangely, I still have a final salary pension with the company I left (from my first bout with them), however I had to start a new money purchase pension with them as they had closed the final salary scheme to new members!

ffacoffipawb

withabix wrote: »

When I left my last employer (for the second time!), I hadn't served the 2 years' service required to leave my pension in the company's money purchase scheme, so I had to either a) transfer MY + EMPLOYER'S contributions (plus growth) to my new employer's scheme or b) take a refund of MY contributions plus growth.

As my new employer doesn't accept transfers in, I had to take a refund.

You didn't have to. You could have transferred to a personal pension and retained the employer contribution and the tax deducted from your refund.

withabix

ffacoffipawb wrote: »

You didn't have to. You could have transferred to a personal pension and retained the employer contribution and the tax deducted from your refund.

That was option c)! Forgot about that one.

dunstonh

A group personal pension falls under personal pension rules and is basically a personal pension. The difference is that admin can be handled by the employer and you get the terms that they negotiate (larger firms being able to get better terms...in theory).

The schemes that the above posters are referring to are final salary occupational pensions which are a different beast and the two year rule has changed on those as well.

mbaz

Hiya - I came on here to ask the same question. I paid into a civil service pension for 7 years between 1999 amd 2006. I would really like to get my contributions back (minus tax obviously) to pay off my debts. Is there anyway of doing this by either reclaiming them directly or moving my pension to something else? (sorry I really dont understand all the rules!!) I am 28 if that is relevant. Many thanks

dunstonh

mbaz wrote: »

Hiya - I came on here to ask the same question. I paid into a civil service pension for 7 years between 1999 amd 2006. I would really like to get my contributions back (minus tax obviously) to pay off my debts. Is there anyway of doing this by either reclaiming them directly or moving my pension to something else? (sorry I really dont understand all the rules!!) I am 28 if that is relevant. Many thanks

You cannot touch it. Govt backed schemes used to be 2 years but its only a few months now.