Struggling to understand my very small pension pot

Annie3465

Does anyone know if I can take 25% and 'leave the rest where it is'?

I hope someone can help me, I've got a lot of info about my small private pension (defined contribution benefit). There is so much info I'm overwhelmed by it. I only worked for the company for about 3 or 4 years and the amount is about £14,000. I could buy an annuity ( I don't understand them). But I'll only get about £300 per year (according to the paperwork) so that means I have to live for a very long time to get it all back. So I thought take 25% tax free now, and leave the rest where it is. But in all the info, I can't find out if I can do this.

I've had a meeting with pensionwise, but this didn't make sense. I really don't understand numbers. And all the info I've been given if for large amounts of money and investments and annuitities.  The 25% will buy me a new bed and spends on my holiday. I'll like to keep the rest to pay for my utilitiy bills when I'm older. 

I do not want to 'invest', as I don't understand, so will get scammed.

SVaz

Do you have any other income at the moment?
Any other pensions anywhere? 

Are you on benefits?

Basically, you can take your 25% tax free and leave the rest, assuming you are over 55. 

molerat

Your pension is already likely "invested".

How old are you ?

The current scheme may have limited choices as to how you can withdraw money, you need to name the provider and scheme so someone can give some pointers, you would be able to move it though to a more accessible scheme.

There may be better options than taking the 25% in one go depending on your other income.

DRS1

A few other questions

Do you know what sort of pension scheme it is?  There are two main types: Defined Contribution and Defined Benefits.
private pension (defined contribution benefit) seems to mix these two types together.  Taking 25% at age 55 or above and leaving the rest behind until you want it at a later date is only something you can do with defined contribution schemes.

How old are you?  You say you have a pot of £14k and that will buy you an annuity of £300pa.  That looks like an annuity rate of 2.2% which looks very low even if you are a 55 year old woman with a spouse who is a lot younger than you.  Is the £300 after taking a lump sum?  Does the annuity increase?  Is there a spouse's annuity after you die?

Does the paperwork talk about drawdown at all?  Does the pension scheme allow it?  Would you have to transfer to another scheme to do it?  Drawdown is what you are looking to do so if you ignore the rest of the paperwork make sure you read that bit over and over.  It can get confusing - especially if people start talking about FAD and UFPLS.

Do you know what the pension is invested in now?  You may not like to invest but if you leave some of it there then it has to be in something (even if it is only the same thing as it is in now).  And that is investing

p00hsticks

Annie3465 said:

Does anyone know if I can take 25% and 'leave the rest where it is'?

I hope someone can help me, I've got a lot of info about my small private pension (defined contribution benefit).

Which is it ? 
It's either 'defined contribution' (where you have a pot of money)
or 'defined benefit' (where you have a promise to pay you a certain sum or money every month / year for life)

Annie3465

SVaz said:

Do you have any other income at the moment?
Any other pensions anywhere? 

Are you on benefits?


Basically, you can take your 25% tax free and leave the rest, assuming you are over 55. 

I'm nearly 60, not on any benefits. 

Annie3465

SVaz said:

Do you have any other income at the moment?
Any other pensions anywhere? 

Are you on benefits?

Basically, you can take your 25% tax free and leave the rest, assuming you are over 55. 

Trying to figure how to reply

Annie3465

Sorry, I'm trying to figure out how the reply to the posts. God this is frustrating.

I'm nearly 60 and it a defined contribution benefit pension. I'm not on benefits and no partner or anyone else who has pensions etc. 

From what people have said, I think I can leave it.

Dazed_and_C0nfused

Annie3465 said:

Sorry, I'm trying to figure out how the reply to the posts. God this is frustrating.

I'm nearly 60 and it a defined contribution benefit pension. I'm not on benefits and no partner or anyone else who has pensions etc. 

From what people have said, I think I can leave it.

It cant be what you have called it.

Defined contribution is a pot of money

Defined benefit is a bit like deferred salary, a pension that is paid based on the rules of the pension scheme.  Used to referred to as a final salary pension.

SVaz

So you have no income,  congratulations you can get the whole pension out tax free in one year, assuming it IS a DC pension, if it is it will be in a Fund or Funds that will need selling to cash. 

You then take 25% tax free ( £3500) and can draw the rest either all at once or monthly at £960 x 12 if you don’t want to be bothered with claiming back the tax that would be paid on a lump sum.  
Then you open a Cash isa and put in the £11500 earning over 4% currently.  Job done.

Qyburn

Who is the pension provider?