Pension questions

oliel

I have 3 pensions 1 with pru 1 from an old employment and one with nest - I work full time and pay tax - i'm a bit confused on pensions .   Is there a percentage lump sum I can take out without paying taxon it?  if so can I take that percentage out of each pension of just one?  

Dazed_and_C0nfused

oliel said:

I have 3 pensions 1 with pru 1 from an old employment and one with nest - I work full time and pay tax - i'm a bit confused on pensions .   Is there a percentage lump sum I can take out without paying taxon it?  if so can I take that percentage out of each pension of just one?  

If you are 55 or older you can usually take a 25% tax free lump sum out of a defined contribution pension.

You can do this for each DC pension (subject to a total limit of ~£268k).

If you take any more than the 25% TFLS (even a penny) then you would trigger the Money Purchase Annual Allowance and this forever limits how much you can add to a defined contribution pension like Nest.

The exception to this is if you buy an annuity.

If you have a defined benefit pension you may be able to get some tax free cash but it would be based on the scheme rules.  And the normal pension age for a DB would often be from 60-68.  Taking money earlier from a DB scheme usually means getting less as you are asking to take it for a longer period.  This is not a "penalty".

oliel

Dazed_and_C0nfused said:

oliel said:

I have 3 pensions 1 with pru 1 from an old employment and one with nest - I work full time and pay tax - i'm a bit confused on pensions .   Is there a percentage lump sum I can take out without paying taxon it?  if so can I take that percentage out of each pension of just one?  

If you are 55 or older you can usually take a 25% tax free lump sum out of a defined contribution pension.

You can do this for each DC pension (subject to a total limit of ~£268k).

If you take any more than the 25% TFLS (even a penny) then you would trigger the Money Purchase Annual Allowance and this forever limits how much you can add to a defined contribution pension like Nest.

The exception to this is if you buy an annuity.

If you have a defined benefit pension you may be able to get some tax free cash but it would be based on the scheme rules.  And the normal pension age for a DB would often be from 60-68.  Taking money earlier from a DB scheme usually means getting less as you are asking to take it for a longer period.  This is not a "penalty".

Dazed_and_C0nfused said:

oliel said:

I have 3 pensions 1 with pru 1 from an old employment and one with nest - I work full time and pay tax - i'm a bit confused on pensions .   Is there a percentage lump sum I can take out without paying taxon it?  if so can I take that percentage out of each pension of just one?  

If you are 55 or older you can usually take a 25% tax free lump sum out of a defined contribution pension.

You can do this for each DC pension (subject to a total limit of ~£268k).

If you take any more than the 25% TFLS (even a penny) then you would trigger the Money Purchase Annual Allowance and this forever limits how much you can add to a defined contribution pension like Nest.

The exception to this is if you buy an annuity.

If you have a defined benefit pension you may be able to get some tax free cash but it would be based on the scheme rules.  And the normal pension age for a DB would often be from 60-68.  Taking money earlier from a DB scheme usually means getting less as you are asking to take it for a longer period.  This is not a "penalty".

thanks how do i know if its a db scheme or a dc scheme?  

Dazed_and_C0nfused

oliel said:

Dazed_and_C0nfused said:

oliel said:

I have 3 pensions 1 with pru 1 from an old employment and one with nest - I work full time and pay tax - i'm a bit confused on pensions .   Is there a percentage lump sum I can take out without paying taxon it?  if so can I take that percentage out of each pension of just one?  

If you are 55 or older you can usually take a 25% tax free lump sum out of a defined contribution pension.

You can do this for each DC pension (subject to a total limit of ~£268k).

If you take any more than the 25% TFLS (even a penny) then you would trigger the Money Purchase Annual Allowance and this forever limits how much you can add to a defined contribution pension like Nest.

The exception to this is if you buy an annuity.

If you have a defined benefit pension you may be able to get some tax free cash but it would be based on the scheme rules.  And the normal pension age for a DB would often be from 60-68.  Taking money earlier from a DB scheme usually means getting less as you are asking to take it for a longer period.  This is not a "penalty".

Dazed_and_C0nfused said:

oliel said:

I have 3 pensions 1 with pru 1 from an old employment and one with nest - I work full time and pay tax - i'm a bit confused on pensions .   Is there a percentage lump sum I can take out without paying taxon it?  if so can I take that percentage out of each pension of just one?  

If you are 55 or older you can usually take a 25% tax free lump sum out of a defined contribution pension.

You can do this for each DC pension (subject to a total limit of ~£268k).

If you take any more than the 25% TFLS (even a penny) then you would trigger the Money Purchase Annual Allowance and this forever limits how much you can add to a defined contribution pension like Nest.

The exception to this is if you buy an annuity.

If you have a defined benefit pension you may be able to get some tax free cash but it would be based on the scheme rules.  And the normal pension age for a DB would often be from 60-68.  Taking money earlier from a DB scheme usually means getting less as you are asking to take it for a longer period.  This is not a "penalty".

thanks how do i know if its a db scheme or a dc scheme?  

DC is where you build up a pot of money to use in retirement.

DB is where you don't have a pot of money, you get whatever the scheme rules say, a bit like deferred salary.  These are usually known as final salary or CARE (Career Average Revalued Earnings) schemes.  The pension you receive is usually based on your length of service and final salary or you build up a set amount per year based on your salary each year, for example you might accrue 1.85% of your salary for each year of service in the current NHS scheme.  And this is revalued each year to account for inflation.

Most pensions will explain that somewhere.

Albermarle

Pension basics | Help with pension basics | MoneyHelper

xylophone

Presumably the old employer scheme is this?

https://forums.moneysavingexpert.com/discussion/6406153/can-you-take-money-out-a-pension-before-retirement-date

Hi I have an old pension that I had pretty much forgotten about its current value is about £10k.  Am I able to get money out of it early?  Its aegon tsp buyout plan (from a former employment).   The retirement age on it is dated 2032.  

According to Aegon
 

• If an occupational pension scheme winds up, each member’s benefits have to be secured outside the scheme. Members will usually be given the option to choose where their own funds are transferred to and one of the options could be a transfer to an individual buyout policy. If they don’t make a choice or if the trustees have been unable to contact a member, the trustees can arrange for a buyout policy to be issued in the member’s name. These are usually referred to as trustee-proposed buyout policies (TPS32) or group buyouts as they are set up without the consent of the member.

This is a specialised type of pension and it may not be possible for you to access it before you reach age 60.

You would need to check with Aegon.

With regard to the other two, assuming that they are standard DC schemes it should be possible for you to access them  but probably not

until you reach age 57.

Check with the provider.


https://www.mandg.com/pru/customer/en-gb/retirement-planning/approaching-retirement/information-you-will-receive-from-prudential

https://www.nestpensions.org.uk/schemeweb/memberhelpcentre/retirement-pot/how-to-take-money-out.html#:~:text=You have to be 55,are kept up to date.


 

oliel

xylophone said:

Presumably the old employer scheme is this?

https://forums.moneysavingexpert.com/discussion/6406153/can-you-take-money-out-a-pension-before-retirement-date

Hi I have an old pension that I had pretty much forgotten about its current value is about £10k.  Am I able to get money out of it early?  Its aegon tsp buyout plan (from a former employment).   The retirement age on it is dated 2032.  

According to Aegon
 

• If an occupational pension scheme winds up, each member’s benefits have to be secured outside the scheme. Members will usually be given the option to choose where their own funds are transferred to and one of the options could be a transfer to an individual buyout policy. If they don’t make a choice or if the trustees have been unable to contact a member, the trustees can arrange for a buyout policy to be issued in the member’s name. These are usually referred to as trustee-proposed buyout policies (TPS32) or group buyouts as they are set up without the consent of the member.

This is a specialised type of pension and it may not be possible for you to access it before you reach age 60.

You would need to check with Aegon.

With regard to the other two, assuming that they are standard DC schemes it should be possible for you to access them  but probably not

until you reach age 57.

Check with the provider.


https://www.mandg.com/pru/customer/en-gb/retirement-planning/approaching-retirement/information-you-will-receive-from-prudential

https://www.nestpensions.org.uk/schemeweb/memberhelpcentre/retirement-pot/how-to-take-money-out.html#:~:text=You have to be 55,are kept up to date.


 

yes I think thats the one for one of my pensions Think I need to speak to Aegon and clarify the situation with it. Thanks

oliel

Justoliel said:

xylophone said:

Presumably the old employer scheme is this?

https://forums.moneysavingexpert.com/discussion/6406153/can-you-take-money-out-a-pension-before-retirement-date

Hi I have an old pension that I had pretty much forgotten about its current value is about £10k.  Am I able to get money out of it early?  Its aegon tsp buyout plan (from a former employment).   The retirement age on it is dated 2032.  

According to Aegon
 

• If an occupational pension scheme winds up, each member’s benefits have to be secured outside the scheme. Members will usually be given the option to choose where their own funds are transferred to and one of the options could be a transfer to an individual buyout policy. If they don’t make a choice or if the trustees have been unable to contact a member, the trustees can arrange for a buyout policy to be issued in the member’s name. These are usually referred to as trustee-proposed buyout policies (TPS32) or group buyouts as they are set up without the consent of the member.

This is a specialised type of pension and it may not be possible for you to access it before you reach age 60.

You would need to check with Aegon.

With regard to the other two, assuming that they are standard DC schemes it should be possible for you to access them  but probably not

until you reach age 57.

Check with the provider.


https://www.mandg.com/pru/customer/en-gb/retirement-planning/approaching-retirement/information-you-will-receive-from-prudential

https://www.nestpensions.org.uk/schemeweb/memberhelpcentre/retirement-pot/how-to-take-money-out.html#:~:text=You have to be 55,are kept up to date.


 

yes I think thats the one for one of my pensions Think I need to speak to Aegon and clarify the situation with it. Thanks

I just checked it is TPS32 buyout plan it says WP Endownment

LHW99

If any of the pensions are current autoenrollment ones (Nest?) then you may not be allowed to take the 25% unless you opt out, and opt back after taking the money, You may lose a few months contributions that way.

oliel

LHW99 said:

If any of the pensions are current autoenrollment ones (Nest?) then you may not be allowed to take the 25% unless you opt out, and opt back after taking the money, You may lose a few months contributions that way.

Thanks my intention is to leave that one alone I think thats a better idea

xylophone

I just checked it is TPS32 buyout plan it says WP Endownment

The posts here MAY be relevant if you have a GMP but you must check the specifics of your policy with Aegon.

https://forums.moneysavingexpert.com/discussion/6468459/scottish-equitable-section-32-buyout-non-reserved-fund-value/p1