Access to Defined Benefits Pension

Sheba42

Hi Folks,  I have an old pension with my local council called a defined benefits and I recently asked for a CETV which is 28k.  I don't work so I have no income whatsoever, my husband works. 
Can someone tell me how I can access this money please ? 

 Can I just ask for this whole amount to be paid into my bank account or do I need to open something Google said,  called a SIPP ? 

Can I then take my 12.5k personal allowance tax free, plus the 25% I'm allowed tax free ? 
Therefore 19.5k will be tax free and I will then pay standard tax on the remaining 8.5k ? 

Have I got this right ? 

I know nothing about pensions and have just been using Google for advice.
I would really appreciate your help here folks as I've no idea what I'm doing here and if I've got this completely wrong. 

Many thanks in advance to anyone who can help. 

Marcon

Sheba42 said:

Hi Folks,  I have an old pension with my local council called a defined benefits and I recently asked for a CETV which is 28k.  I don't work so I have no income whatsoever, my husband works. 
Can someone tell me how I can access this money please ? 

 Can I just ask for this whole amount to be paid into my bank account or do I need to open something Google said,  called a SIPP ? 

Can I then take my 12.5k personal allowance tax free, plus the 25% I'm allowed tax free ? 
Therefore 19.5k will be tax free and I will then pay standard tax on the remaining 8.5k ? 

Have I got this right ? 

I know nothing about pensions and have just been using Google for advice.
I would really appreciate your help here folks as I've no idea what I'm doing here and if I've got this completely wrong. 

Many thanks in advance to anyone who can help. 

How old are you? Unless you are aged at least 55, you can't access your pension unless you qualify for early retirement on the grounds of medically certified ill health.

Rather than relying on Google, have you thought of using the website for your pension scheme, or talking to the administrators? It's unlikely you can take the lot as cash, but might be possible if you have no other pension provision (other than any state pension); you'd need to check with the scheme**. Otherwise you would have to transfer to a personal pension and you could access your cash that way. Just because you can doesn't mean it's a good idea to do so...what will you live on in retirement?

Edit - just seen that you posted the same question in 2021. Might be worth having a look at the answers to that, many of which are still valid and helpful now, including an explanation from SilverTabby as to why you've apparently been told** that you can't take the lot as cash: https://forums.moneysavingexpert.com/discussion/6302113/pension-advice-please#latest

No point repeating it all again here!

Dazed_and_C0nfused

Sheba42 said:

Hi Folks,  I have an old pension with my local council called a defined benefits and I recently asked for a CETV which is 28k.  I don't work so I have no income whatsoever, my husband works. 
Can someone tell me how I can access this money please ? 

 Can I just ask for this whole amount to be paid into my bank account or do I need to open something Google said,  called a SIPP ? 

Can I then take my 12.5k personal allowance tax free, plus the 25% I'm allowed tax free ? 
Therefore 19.5k will be tax free and I will then pay standard tax on the remaining 8.5k ? 

Have I got this right ? 

I know nothing about pensions and have just been using Google for advice.
I would really appreciate your help here folks as I've no idea what I'm doing here and if I've got this completely wrong. 

Many thanks in advance to anyone who can help. 

What is the attraction of transferring out of the guaranteed pension for life you would be entitled to if you did nothing?

What spousal pension does the DB pension provide?

Why would you want to take the whole £28k in one tax year?

As you are married and have no current income is your Personal Allowance still £12,570 or is it only £11,310 (from applying for Marriage Allowance)?

Brie

The chances of being able to transfer a DB pension, even a small one, may be very difficult.  You will have to pay for advice from a financial adviser which may cost a few thousand pounds and they may then turn around and say they don't recommend it.  

But if you are at least 55 you could ask to take the pension now.  You should then be given an option to take a proportion (about 25% but not necessarily) tax free and then you would either get a pension paid monthly or yearly.  If you are not earning or in receipt of any benefits then there would be no tax paid on any pension you received.  

If you are married or similar you may also be given a guarantee for your spouse/partner should you die first.  

But also if you are married or similar and haven't already check the status of your married allowance (or whatever it's called) where you transfer some of your tax allowance to your OH so they pay less tax.  Sounds like with this level of benefit there won't be a huge income for you so you are likely to be able to leave the allowance with your OH.  But always check!

Sheba42

Sorry Marcon, I'm 59.  I'm happy just to live on state pension when I'm entitled to it as I'm assuming such a small pension like this wouldn't give me much as income per year, would it ? 

So I'd rather just take it all now as we really need a new kitchen and bathroom,  current ones are 25 years old.   

I just haven't a clue how to access it and just don't know where to start. Thanks for replying 😊

Brie

A DB pension should send you a annual or biennial statement that outlines what you might be entitled to at retirement.  Sometimes they are a bit off the mark as they may be making calculations for when you retire based on you continuing to work for them until that time.  (had this with my DB)

But the thing to do is to ask for a retirement quote.  Give them a fictional date maybe in 3 months time.  Or your next birthday if that's within 6 months.  Some schemes won't give quotes more than 6 months into the future.  

If you don't know who to ask for this info then phone up the council, ask for payroll and ask them.  Unless of course they've got this already on their website.  Contacting the scheme admins will likely require you to give you NINo. and date of birth as well as full name and address.

If you get something that is difficult to understand come back and we'll see what else we can answer for you.  

fyi - I worked pensions admin of various sorts for nearly 20 years and some of it still baffles me - I'm amazed at how some people manage to navigate through it all without any background in it.  

Dazed_and_C0nfused

Sheba42 said:

Sorry Marcon, I'm 59.  I'm happy just to live on state pension when I'm entitled to it as I'm assuming such a small pension like this wouldn't give me much as income per year, would it ? 

So I'd rather just take it all now as we really need a new kitchen and bathroom,  current ones are 25 years old.   

I just haven't a clue how to access it and just don't know where to start. Thanks for replying 😊

Isn't that the first thing to consider when thinking about this?

If you are giving up say £200/year and no survivor pension in return for £28k it might be a sensible move, albeit taking the funds out over 2 tax years rather all in one go.

But if the pension you have accrued is say £2,000/year with a survivor pension then it makes the £28k a lot less attractive, especially when you get that card from the King on your 100th birthday 🎂

Sheba42

Marcon said:

Sheba42 said:

Hi Folks,  I have an old pension with my local council called a defined benefits and I recently asked for a CETV which is 28k.  I don't work so I have no income whatsoever, my husband works. 
Can someone tell me how I can access this money please ? 

 Can I just ask for this whole amount to be paid into my bank account or do I need to open something Google said,  called a SIPP ? 

Can I then take my 12.5k personal allowance tax free, plus the 25% I'm allowed tax free ? 
Therefore 19.5k will be tax free and I will then pay standard tax on the remaining 8.5k ? 

Have I got this right ? 

I know nothing about pensions and have just been using Google for advice.
I would really appreciate your help here folks as I've no idea what I'm doing here and if I've got this completely wrong. 

Many thanks in advance to anyone who can help. 

How old are you? Unless you are aged at least 55, you can't access your pension unless you qualify for early retirement on the grounds of medically certified ill health.

Rather than relying on Google, have you thought of using the website for your pension scheme, or talking to the administrators? It's unlikely you can take the lot as cash, but might be possible if you have no other pension provision (other than any state pension); you'd need to check with the scheme**. Otherwise you would have to transfer to a personal pension and you could access your cash that way. Just because you can doesn't mean it's a good idea to do so...what will you live on in retirement?

Edit - just seen that you posted the same question in 2021. Might be worth having a look at the answers to that, many of which are still valid and helpful now, including an explanation from SilverTabby as to why you've apparently been told** that you can't take the lot as cash: https://forums.moneysavingexpert.com/discussion/6302113/pension-advice-please#latest

No point repeating it all again here!

Thank you ! I  knew I had asked this here but couldn't even get into the forum without saying forgot password, then I couldn't find how to access previous posts either.  I done nothing last time after advice,  as life and deaths happened and it was put on the back burner.  I will now go and reread that thread so I can work out what to do. 

Marcon

Sheba42 said:

Marcon said:

Sheba42 said:

Hi Folks,  I have an old pension with my local council called a defined benefits and I recently asked for a CETV which is 28k.  I don't work so I have no income whatsoever, my husband works. 
Can someone tell me how I can access this money please ? 

 Can I just ask for this whole amount to be paid into my bank account or do I need to open something Google said,  called a SIPP ? 

Can I then take my 12.5k personal allowance tax free, plus the 25% I'm allowed tax free ? 
Therefore 19.5k will be tax free and I will then pay standard tax on the remaining 8.5k ? 

Have I got this right ? 

I know nothing about pensions and have just been using Google for advice.
I would really appreciate your help here folks as I've no idea what I'm doing here and if I've got this completely wrong. 

Many thanks in advance to anyone who can help. 

How old are you? Unless you are aged at least 55, you can't access your pension unless you qualify for early retirement on the grounds of medically certified ill health.

Rather than relying on Google, have you thought of using the website for your pension scheme, or talking to the administrators? It's unlikely you can take the lot as cash, but might be possible if you have no other pension provision (other than any state pension); you'd need to check with the scheme**. Otherwise you would have to transfer to a personal pension and you could access your cash that way. Just because you can doesn't mean it's a good idea to do so...what will you live on in retirement?

Edit - just seen that you posted the same question in 2021. Might be worth having a look at the answers to that, many of which are still valid and helpful now, including an explanation from SilverTabby as to why you've apparently been told** that you can't take the lot as cash: https://forums.moneysavingexpert.com/discussion/6302113/pension-advice-please#latest

No point repeating it all again here!

Thank you ! I  knew I had asked this here but couldn't even get into the forum without saying forgot password, then I couldn't find how to access previous posts either.  I done nothing last time after advice,  as life and deaths happened and it was put on the back burner.  I will now go and reread that thread so I can work out what to do. 

The first time you asked you got some genuinely helpful replies and they're still good now...especially LGPS expert SilverTabby! You can access previous posts by clicking on the little silhouette in dark green inside a white circle (top right of this webpage), and then clicking on 'my discussions'.

Sheba42

Brie said:

A DB pension should send you a annual or biennial statement that outlines what you might be entitled to at retirement.  Sometimes they are a bit off the mark as they may be making calculations for when you retire based on you continuing to work for them until that time.  (had this with my DB)

But the thing to do is to ask for a retirement quote.  Give them a fictional date maybe in 3 months time.  Or your next birthday if that's within 6 months.  Some schemes won't give quotes more than 6 months into the future.  

If you don't know who to ask for this info then phone up the council, ask for payroll and ask them.  Unless of course they've got this already on their website.  Contacting the scheme admins will likely require you to give you NINo. and date of birth as well as full name and address.

If you get something that is difficult to understand come back and we'll see what else we can answer for you.  

fyi - I worked pensions admin of various sorts for nearly 20 years and some of it still baffles me - I'm amazed at how some people manage to navigate through it all without any background in it.  

Thanks Brie, appreciate your replies 😊

I didn't think I'd need to take advice since it was under 30k, Google says, is that wrong then and I would need to pay a financial advisor ?

I definitely don't want a pension from it as the amount would just be around 1 or 2k per year so I just want to take the money now.  

I've just found someone mention *Trivial Commutation" on my last thread and we don't know what that is.  Could yourself or someone help explain that to me as Google isn't clear ? Is this a way to ask for the whole 28k in one go?   
Thanks again

Sheba42

Marcon said:

Sheba42 said:

Marcon said:

Sheba42 said:

Hi Folks,  I have an old pension with my local council called a defined benefits and I recently asked for a CETV which is 28k.  I don't work so I have no income whatsoever, my husband works. 
Can someone tell me how I can access this money please ? 

 Can I just ask for this whole amount to be paid into my bank account or do I need to open something Google said,  called a SIPP ? 

Can I then take my 12.5k personal allowance tax free, plus the 25% I'm allowed tax free ? 
Therefore 19.5k will be tax free and I will then pay standard tax on the remaining 8.5k ? 

Have I got this right ? 

I know nothing about pensions and have just been using Google for advice.
I would really appreciate your help here folks as I've no idea what I'm doing here and if I've got this completely wrong. 

Many thanks in advance to anyone who can help. 

How old are you? Unless you are aged at least 55, you can't access your pension unless you qualify for early retirement on the grounds of medically certified ill health.

Rather than relying on Google, have you thought of using the website for your pension scheme, or talking to the administrators? It's unlikely you can take the lot as cash, but might be possible if you have no other pension provision (other than any state pension); you'd need to check with the scheme**. Otherwise you would have to transfer to a personal pension and you could access your cash that way. Just because you can doesn't mean it's a good idea to do so...what will you live on in retirement?

Edit - just seen that you posted the same question in 2021. Might be worth having a look at the answers to that, many of which are still valid and helpful now, including an explanation from SilverTabby as to why you've apparently been told** that you can't take the lot as cash: https://forums.moneysavingexpert.com/discussion/6302113/pension-advice-please#latest

No point repeating it all again here!

Thank you ! I  knew I had asked this here but couldn't even get into the forum without saying forgot password, then I couldn't find how to access previous posts either.  I done nothing last time after advice,  as life and deaths happened and it was put on the back burner.  I will now go and reread that thread so I can work out what to do. 

The first time you asked you got some genuinely helpful replies and they're still good now...especially LGPS expert SilverTabby! You can access previous posts by clicking on the little silhouette in dark green inside a white circle (top right of this webpage), and then clicking on 'my discussions'.

Yes I've just been reading those, thanks for that link 👍 We are now googling Trivial Commutation but can't make head nor tail of what it means.  

Why is this all so complicated !