Pension - Cash Park

Spicy21

Hi,
I am looking to pay a lump sum into a private pension and then to transfer this into my work defined benefits pension. I have been employed less than a year so can do this but I would like to avoid investing the money as it would be subject to market forces and I would not be able to wait for any losses to recover.

I thought I had found a provider (Wealthify) that would allow me to hold the pension in cash for the short time before the transfer takes place but apparently it is an error on their website and they cannot do this.

Does anyone know a provider that will let me keep the pension as cash?

Thanks.

Marcon

Spicy21 said:

Hi,
I am looking to pay a lump sum into a private pension and then to transfer this into my work defined benefits pension. I have been employed less than a year so can do this but I would like to avoid investing the money as it would be subject to market forces and I would not be able to wait for any losses to recover.

I thought I had found a provider (Wealthify) that would allow me to hold the pension in cash for the short time before the transfer takes place but apparently it is an error on their website and they cannot do this.

Does anyone know a provider that will let me keep the pension as cash?

Thanks.

Presumably you're doing this to ensure you vest even if you leave with under two years of DB membership? If so, there's no minimum amount to achieve such an objective, so it's probably isn't worth worrying about.  £20 will do the trick and a stakeholder pension will accept it - you can open one yourself free of charge eg with Aviva.

Spicy21

Marcon said:

Spicy21 said:

Hi,
I am looking to pay a lump sum into a private pension and then to transfer this into my work defined benefits pension. I have been employed less than a year so can do this but I would like to avoid investing the money as it would be subject to market forces and I would not be able to wait for any losses to recover.

I thought I had found a provider (Wealthify) that would allow me to hold the pension in cash for the short time before the transfer takes place but apparently it is an error on their website and they cannot do this.

Does anyone know a provider that will let me keep the pension as cash?

Thanks.

Presumably you're doing this to ensure you vest even if you leave with under two years of DB membership? If so, there's no minimum amount to achieve such an objective, so it's probably isn't worth worrying about.  £20 will do the trick and a stakeholder pension will accept it - you can open one yourself free of charge eg with Aviva.

Hi Marcon,

Thank you for your reply.

I’m wanting to put in a lump sum of around £30-40k so I can transfer to the work pension and get an additional amount of defined benefits. It’s better to transfer in than to purchase additional pension but if this amount gets invested and the markets drop then I can’t wait for them to recover before the transfer in deadline. I know I could win if the markets went up but it’s a drop that bothers me and why I’d like the private pension to be kept as cash for the short period of time.

MallyGirl

Do you earn enough to support a pension contribution of this size.
most of the SIPPs let you hold in cash - HL, iWeb, Am bell, interactive investor to name a few

Spicy21

Hi MallyGirl,
The total amount after the 25% uplift would be less than my annual salary and I’ve taken into account the work defined benefits pension so I also don’t go over the annual allowance.

I’ll look at the SIPPs you mention.

Thank you.

Spicy21

Sorry, I have another question. AJBell T&Cs say that it could be 8-12 weeks before they pay the basic rate tax relief into the pension. I’ve always seen this added within a day or two of making a payment (Wealthify and Scottish Widows). Have I just been lucky in the past or does it normally take 8-12 weeks for this to be added to a pension?

Sarahspangles

Spicy21 said:

Sorry, I have another question. AJBell T&Cs say that it could be 8-12 weeks before they pay the basic rate tax relief into the pension. I’ve always seen this added within a day or two of making a payment (Wealthify and Scottish Widows). Have I just been lucky in the past or does it normally take 8-12 weeks for this to be added to a pension?

Can you link to where it says that? Normally with AJB if a contribution is in by the 5th, the tax relief is paid by the 25th of month following.

Dazed_and_C0nfused

Sarahspangles said:

Spicy21 said:

Sorry, I have another question. AJBell T&Cs say that it could be 8-12 weeks before they pay the basic rate tax relief into the pension. I’ve always seen this added within a day or two of making a payment (Wealthify and Scottish Widows). Have I just been lucky in the past or does it normally take 8-12 weeks for this to be added to a pension?

Can you link to where it says that? Normally with AJB if a contribution is in by the 5th, the tax relief is paid by the 25th of month following.

That would be 8-12 weeks though.

Contribution today, in the month to 5th May = tax relief added on 25th June

Sarahspangles

Dazed_and_C0nfused said:

Sarahspangles said:

Spicy21 said:

Sorry, I have another question. AJBell T&Cs say that it could be 8-12 weeks before they pay the basic rate tax relief into the pension. I’ve always seen this added within a day or two of making a payment (Wealthify and Scottish Widows). Have I just been lucky in the past or does it normally take 8-12 weeks for this to be added to a pension?

Can you link to where it says that? Normally with AJB if a contribution is in by the 5th, the tax relief is paid by the 25th of month following.

That would be 8-12 weeks though.

Contribution today, in the month to 5th May = tax relief added on 25th June

True, in my head it’s 7 or 8 weeks because if I contribute on payday (late in the month) the tax relief from two months prior has been waiting in the account for up to 7 days.

It’s predictable though - tax relief has always been paid in between 21st and 23rd

Spicy21

Sarahspangles said:

Spicy21 said:

Sorry, I have another question. AJBell T&Cs say that it could be 8-12 weeks before they pay the basic rate tax relief into the pension. I’ve always seen this added within a day or two of making a payment (Wealthify and Scottish Widows). Have I just been lucky in the past or does it normally take 8-12 weeks for this to be added to a pension?

Can you link to where it says that? Normally with AJB if a contribution is in by the 5th, the tax relief is paid by the 25th of month following.

https://www.ajbell.co.uk/sipp-before-you-apply

Sarahspangles

Spicy21 said:

Sarahspangles said:

Spicy21 said:

Sorry, I have another question. AJBell T&Cs say that it could be 8-12 weeks before they pay the basic rate tax relief into the pension. I’ve always seen this added within a day or two of making a payment (Wealthify and Scottish Widows). Have I just been lucky in the past or does it normally take 8-12 weeks for this to be added to a pension?

Can you link to where it says that? Normally with AJB if a contribution is in by the 5th, the tax relief is paid by the 25th of month following.

https://www.ajbell.co.uk/sipp-before-you-apply

Dazed and Confused has pointed out my ‘by the 5th for 25th of the following month’ is 8 to 12 weeks. But the date it’s paid in seems predictable i.e. you can avoid it being 12 weeks.

I’ve read on this forum that some providers aren’t actually paying you the tax relief, they’re fronting this themselves until HMRC transfers it. Presumably the customer pays for this within other charges.