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Pension drawdown tax free

Attur265
Attur265 Posts: 1 Newbie
Hi all. I have a pendion pot with Bank of America. I am 60 yrs old and have requested a drawdown of 25% tax free. They have refused to pay until I am 65. Are they allowed to do this? Thanks.

Comments

  • Attur265 said:
    Hi all. I have a pendion pot with Bank of America. I am 60 yrs old and have requested a drawdown of 25% tax free. They have refused to pay until I am 65. Are they allowed to do this? Thanks.
    are there any clauses in your scheme? why are they refusing?
  • Mark_d
    Mark_d Posts: 1,956 Forumite
    1,000 Posts First Anniversary Name Dropper
    Wasn't the BoA pension scheme a DB arrangement?  I think the rules are different for these compared to the common DC pensions.
  • Attur265 said:
    Hi all. I have a pendion pot with Bank of America. I am 60 yrs old and have requested a drawdown of 25% tax free. They have refused to pay until I am 65. Are they allowed to do this? Thanks.
    Are you sure you have understood your pension correctly?

    Bank of America seems more likely to have provided a DB pension (akin to deferred salary, sometimes with a tax free PCLS) rather than a DC pension (pot of money).

    You really need to understand the basics of your scheme before doing anything else.
  • dunstonh
    dunstonh Posts: 118,602 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Attur265 said:
    Hi all. I have a pendion pot with Bank of America. I am 60 yrs old and have requested a drawdown of 25% tax free. They have refused to pay until I am 65. Are they allowed to do this? Thanks.
    Drawdown is functionality given on defined contribution schemes.   It is not available on defined benefit schemes.

    Defined contribution schemes can be taken from age 55 (although in some cases, it could be later).   Defined benefit schemes have a scheme age and may or may not allow earlier access. 

    It looks like you have the DB scheme from what you have said.  So, drawdown wont be available and you may be limited to the scheme age.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • poseidon1
    poseidon1 Posts: 766 Forumite
    500 Posts First Anniversary Name Dropper
    Attur265 said:
    Hi all. I have a pendion pot with Bank of America. I am 60 yrs old and have requested a drawdown of 25% tax free. They have refused to pay until I am 65. Are they allowed to do this? Thanks.
    Assuming at all times you were a member of B of A' s UK scheme, then the final salary DB component closed in 2004. If you remained an employee at that point you would have then accrued benefits in the replacement DC scheme together with deferred benefits accruing in the old DB scheme.

    It is likely both schemes retained the original age 65 vesting date. Interestingly, they could potentially have provided access to the DC scheme benefits since that would  merely have been an invested pot with a constantly variable value and in theory subject to age 55 statutory early access irrespective of original vesting age.

    Since they have refused all access to pension benefits until age 65, is it because you had left the company by 2004 and had accrued no benefits under the replacement DC scheme?  In any event, and as pointed out by dunstonh  there is no automatic 25% tax free cash entitlements from DB schemes. 
  • xylophone
    xylophone Posts: 45,426 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Hi all. I have a pendion pot with Bank of America.

    Pending pension? :)

    Do you mean that you have a deferred pension in the Bank of America Defined Benefit Pension Scheme/UK Retirement Plan?

    Did you leave service before the DB Scheme was closed to future accrual or did you remain in service and leave with both DB and DC benefits?


    https://epa.towerswatson.com/doc/BAM/pdf/bofa-boarp-report-and-accounts--.pdf

    Or are you still in service?


    Do you have a Plan Guide? What does it have to say about access to pension before Normal Scheme Retirement Age?


    Have you obtained a state pension forecast?

    https://www.gov.uk/check-state-pension

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