Found a very old, very small pension - what to do with it?

Jensinky · 21 February at 3:13PM

I discovered a pension I had from the 80's recently. Its worth approx £8334.

I'm 58 with a decent personal pension pot from a divorce and an NHS pension. I plan to go part time at 62 and access my private pension to supplement my salary then fully retire at 65 when I will take my NHS pensions - then state pension at 67.

So whatever I do with this small one I will pay tax on it regardless.

Am I allowed to just take all the small one now - getting 25% tax free and paying tax on the remaining 75%?

Marcon · 21 February at 4:08PM

Jensinky said:

I discovered a pension I had from the 80's recently. Its worth approx £8334.

I'm 58 with a decent personal pension pot from a divorce and an NHS pension. I plan to go part time at 62 and access my private pension to supplement my salary then fully retire at 65 when I will take my NHS pensions - then state pension at 67.

So whatever I do with this small one I will pay tax on it regardless.

Am I allowed to just take all the small one now - getting 25% tax free and paying tax on the remaining 75%?

If it's a personal pension, yes.

Ask the provider if you can take it using the 'small pots' rule - you probably can't given the age of the scheme, and to be honest it's no disaster if that's the case. Cashing it in as a 'small pot' means any tax free cash doesn't count towards your overall tax free cash limit from all schemes, and if it's a defined contribution arrangement, you won't trigger the Money Purchase Annual Allowance (which would limit you to £10K a year gross contributions to a defined contribution scheme - probably doesn't matter to you, as the NHS scheme is a DB scheme, so there's no impact on that regardless). If you can't use small pots, then you can just cash it in 'normally'.

If it's some sort of company scheme - especially if it's a defined benefit scheme - then possibly not. Talk to the people administering it and check.

Albermarle · 21 February at 4:21PM

It is possible the pension provider no longer exists, or is part of a larger group.

If you name them you might get some useful feedback.

Jensinky · 21 February at 4:47PM

Albermarle said:

It is possible the pension provider no longer exists, or is part of a larger group.

If you name them you might get some useful feedback.

Its with Aegon - but think pension was originally with Scottish Equitable. I cant even work out which job it was from. They said someting about it being through work but not in a work pension group - or something like that - think I need another conversation with them

Jensinky · 21 February at 4:51PM

Marcon said:

Jensinky said:

I discovered a pension I had from the 80's recently. Its worth approx £8334.

I'm 58 with a decent personal pension pot from a divorce and an NHS pension. I plan to go part time at 62 and access my private pension to supplement my salary then fully retire at 65 when I will take my NHS pensions - then state pension at 67.

So whatever I do with this small one I will pay tax on it regardless.

Am I allowed to just take all the small one now - getting 25% tax free and paying tax on the remaining 75%?

If it's a personal pension, yes.

Ask the provider if you can take it using the 'small pots' rule - you probably can't given the age of the scheme, and to be honest it's no disaster if that's the case. Cashing it in as a 'small pot' means any tax free cash doesn't count towards your overall tax free cash limit from all schemes, and if it's a defined contribution arrangement, you won't trigger the Money Purchase Annual Allowance (which would limit you to £10K a year gross contributions to a defined contribution scheme - probably doesn't matter to you, as the NHS scheme is a DB scheme, so there's no impact on that regardless). If you can't use small pots, then you can just cash it in 'normally'.

If it's some sort of company scheme - especially if it's a defined benefit scheme - then possibly not. Talk to the people administering it and check.

I definitely need another conversation with them. Seemingly contributions were just over £2000 (I assume thats employer and employee). Bearing in mind the two possible companies it could have been I worked at for a year at each and was only on about £5k per year - so the contributions seem large?!!!