Pension drawdown tax free

Attur265

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.

Markmywords

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

Wasn't the BoA pension scheme a DB arrangement?  I think the rules are different for these compared to the common DC pensions.

Dazed_and_C0nfused

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.

Albermarle

Defined benefit: final salary pension schemes explained | MoneyHelper

Defined Contribution Pension schemes | MoneyHelper

dunstonh

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.

poseidon1

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

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