Pensions

patsy2090

I know what you are saying about good borrowing I did it 20 years ago to extend and it added a fair bit to my property.  Not long after my partner went part time due to unexpected health issues and caring commitments , so whilst my income covered it and we have been ok, we ran up a bit of debt over years and I just want to have the guarantee now that’s it’s paid off.  

The pension tax free lump sum was just a consideration I am very risk adverse nowadays 

LHW99

A few other things to check / consider:

Taking 25% tax-free from your current work pension may not be possible unless you withdraw from the scheme to do it, and then re-join. That would mean losing possibly a few months opportunity to contribute / receive the company contributions.

If you take more than the 25% from either DC scheme, you will be restricted in the amount you can put into a pension going forward (MPAA - £10k, or your gross salary if lower).

Putting a DB scheme into payment does not trigger the MPAA. It is likely to have a PCLS (TFLS equivalent) and the income could be diverted to one of the DC pensions, which would give extra tax refunds.

For the last, you would need to consider what the normal retirement age for the DB is (60, 65, SPA) and how close you are to it, as income would be reduced for each year taken before NRA.

On the whole, increasing the mortgage could be the best option, but you say you have an adviser - if you pay an ongoing fee, what does he / she suggest?

patsy2090

Technically we would have to close the current one they call it A and then open B.  They have advised this would be set up at same time so that we do not loose contributions. 

 I have only spoke to someone briefly so do not have a financial advisor it was a friend who was a financial advisor.  They took theirs out completely and reinvested so that if anything happened to him his wife and kids got full amount. They were 60 at time. 

I am not sure what you mean at all in 3rd paragraph it’s all new to me.

i will also check normal retirement age for the schemes as you suggest. 

 i really thought it would be simple.  I literally thought taking 25% tax free whilst high rate tax payer then combining the 2 dc’s with new DC (B) I would take out would be a benefit to me just now from lifestyle perspective as would ease finances just now. 

I think because we have had illness in past I saw the benefit in making things easier now in case we can’t when older but only as long as we had enough for future., because I was leaving my final salary alone I thought combined with state pension and small pensions we would be ok. 

Thanks for answering questions I really appreciate it. 

Albermarle

You mention the word frozen often, which can confuse things.
Even if you are not contributing to an old DC pension anymore, your money is still invested within the pension, so the value will go up and down and fees will still be being taken. So it will be in fact active.
Even if you take the 25% tax free the remaining 75% ( which is in the jargon crystallised) will also still be held in investments within the pension and the value will go up and down and fees will be charged.
Normally you can get on line access to a DC pension, or at least get annual statements. You should be able to see from these how the value varies each year.

From a practical point of view you first need to check this ;
Taking 25% tax-free from your current work pension may not be possible unless you withdraw from the scheme to do it, 

If that is the case you maybe limited to combining the two older pensions into one, and taking the 25% just from those.

patsy2090

I would have to withdraw and it would set up as new one right away. I was going to leave this one alone at first and only take from 29k (crystallised)) however if I could take from this one it would solve all issues.  My final salary one I am leaving it alone until no longer higher rate tax payer.  I am going to find out costs involved in starting new one I can access this online and when I turn 55 next month can actually action drawdown online 

bjorn_toby_wilde

patsy2090 said:

Technically we would have to close the current one they call it A and then open B.  They have advised this would be set up at same time so that we do not loose contributions. 

I believe it’s actually the other way around. You would need to set up B first as the receiving account then ask Provider B to request the transfer in of funds from A.

dunstonh

bjorn_toby_wilde said:

patsy2090 said:

Technically we would have to close the current one they call it A and then open B.  They have advised this would be set up at same time so that we do not loose contributions. 

I believe it’s actually the other way around. You would need to set up B first as the receiving account then ask Provider B to request the transfer in of funds from A.

Correct.  The receiving scheme does the work.   i.e. they contact the ceding scheme and request the transfer.   Not the other way around.