Small Phoenix Life DC Pension

CuttySark12

Have a tiny Phoenix Life (ex Scot Prov) pension approaching intended Retirement Date in Nov 25 (age 60) - with an Estimated Value of circa only £7k. Apparently there is a (small) Guaranteed Annual and Final Bonus applicable on it.  Not in any desperate need of the funds atm or in the near future. Still currently working. Best to leave where it is, or pursue other options ??
Thanks for listening guys.

LHW99

Generally people say if you don't need it don't take it.

What happens after age 60? Pensions don't mature as such, but this sounds a bit like the old endowment policies if it has annual and a final bonus.

Albermarle

LHW99 said:

Generally people say if you don't need it don't take it.

What happens after age 60? Pensions don't mature as such, but this sounds a bit like the old endowment policies if it has annual and a final bonus.

Or it could be a 'With Profits' type fund.

OP- Have they contacted you with your options at age 60?

Do you have any other pensions? Maybe you could just transfer it into one of those at some point.

ali_bear

You need to understand what type of pension it is and what options are available to you. Also, what are the charges?

If it is a DC fund and the value is less than 10k you could cash it all in under the "small pots rule". You would pay income tax - at your marginal rate - on 75% of it. Use the money or put into an ISA. 

Or you could transfer it into another DC fund that has lower fees. 

If it is DB then maybe you could defer it, but check this doesn't make you worse off overall. 

dunstonh

What happens after age 60? Pensions don't mature as such, but this sounds a bit like the old endowment policies if it has annual and a final bonus.

An old plan like that probably has a forced maturity age of "by 75".    

The final and annual bonus references mean it is in a with profits fund.     It could be conventional WP or unitised WP, depending on its age.    If we are talking a 70s or 80s pension in a WP fund, then it's probably conventional WP.

Just for reference, With Profits funds were available in all the common tax wrappers.   Even ISAs.

Albermarle

ali_bear said:

You need to understand what type of pension it is and what options are available to you. Also, what are the charges?

If it is a DC fund and the value is less than 10k you could cash it all in under the "small pots rule". You would pay income tax - at your marginal rate - on 75% of it. Use the money or put into an ISA. 

Or you could transfer it into another DC fund that has lower fees. 

If it is DB then maybe you could defer it, but check this doesn't make you worse off overall. 

Only if Phoenix offer that facility with that pension.
Some providers do not offer the possibility to withdraw under the Small Pots rule.

SouthCoastBoy

i have a small pension with Phoenix (legacy NPI SERPS with profits pension), currently around 22k, although transfer value only around 12k, that matures when I'm 65. On maturity I'm planning to transfer mine out to my SIPP. I'm assuming that will be possible without any loss of final bonus etc. The rules, to me, seem a bit of opaque from the literature I receive on an annual basis so time will tell.

dunstonh

SouthCoastBoy said:

i have a small pension with Phoenix (legacy NPI SERPS with profits pension), currently around 22k, although transfer value only around 12k, that matures when I'm 65. On maturity I'm planning to transfer mine out to my SIPP. I'm assuming that will be possible without any loss of final bonus etc. The rules, to me, seem a bit of opaque from the literature I receive on an annual basis so time will tell.

Don't worry. Nothing is opaque and ex NPI plans work the same as similar other plans 

DRS1

One thing to mention about with profits policies is they often have a market value reduction.  So if you transfer or take benefits before your specified retirement age there may be a reduction to the value.  I am not sure if the 22k and 12k figures reflect such a reduction or whether they are something else.

The insurer should tell you if a market value reduction applies at the moment.

CuttySark12

Thank you all.
£7k Phoenix policy is a WP type fund and is DC not DB.
Started in 1991 but frozen shortly after with no addt contributions.
I do have 4/5 other pensions from historical working patterns of differing sizes (one is a DB - rest are smaller DC ones)
Thanks