Not allowed to take 25% tax free – wrong kind of pensions!?

Sandy444

Both in our 70s. Have two small pensions (see below) which are not being contributed to anymore and are just sitting there.

We recently enquired if we could take 25% tax free from either of these and were told that these are not the kind of pensions that you can do this with (?) and would have to transfer to a different type of pension. Not sure which of these two pensions would be better to be left sitting and which we should transfer and to who? 

Fund name: Av FP With-Profits Sub-Fund (Main Series 1)

Total policy value (24/02/2025)

£37,263.39

Final bonus

+£4,972.64

Transfer value of this plan

£42,236.03

Policy Description: Individual Investment Account

Fund name: Aviva Deposit(PM) PensionNonChargeableSeries 01

Unit price:£6.1094 

Number of units: 9,257.2861 

Fund value: £56,556.46

Thanks in advance for any light you can throw on to this. 

DRS1

I am not sure but I think the problem may not be with the 25% but with what you do with the balance.  Your policies may date from a time when you were expected to take an annuity when you retired pre drawdown days.  So they may not support you just leaving the 75% sitting there.  However Aviva will have more modern pensions which do support drawdown so why not just transfer to one of them?

You need to check the policies to see if there are any guarantees/benefits you would lose by transferring but Aviva ought to tell you that if you ask them.

Marcon

DRS1 said:

I am not sure but I think the problem may not be with the 25% but with what you do with the balance.  Your policies may date from a time when you were expected to take an annuity when you retired pre drawdown days.  So they may not support you just leaving the 75% sitting there.  However Aviva will have more modern pensions which do support drawdown so why not just transfer to one of them?

You need to check the policies to see if there are any guarantees/benefits you would lose by transferring but Aviva ought to tell you that if you ask them.

I think you've hit the nail on the head. Back in 2010 OP was posting about whether or not to combine these two pensions, and confirmed then that one was definitely a personal pension. The terms of the contracts then in force wouldn't have reflected the options available under more modern contracts, for the simple reason those options didn't exist.

Sandy444

Thanks both, for the information. I can confirm that both these contracts when in recent discussion with Aviva were labelled 'heritage' so I guess the comment above stating that these options didn't exist makes sense.