Pension pot withdrawal

Albertsslave

Hi,
My partner (67F) has a private pension pot of a bit over 30K. She has contacted her pension company (AON) asking to withdraw the funds to her bank account but she was told as the amount was over 30K she could not. Surely that can't be correct? What are the rules as I am also considering the same with a smaller pot. We are trying to sell our current property and intend use these funds towards our next property. Thanks for any advice

Marcon

Albertsslave said:

Hi,
My partner (67F) has a private pension pot of a bit over 30K. She has contacted her pension company (AON) asking to withdraw the funds to her bank account but she was told as the amount was over 30K she could not. Surely that can't be correct? What are the rules as I am also considering the same with a smaller pot. We are trying to sell our current property and intend use these funds towards our next property. Thanks for any advice

It's correct if she has a defined benefit scheme; or if she has a defined contribution scheme with 'safeguarded benefits' (some sort of promise such as a Guaranteed Annuity Rate).

If it's either of the above (and I suspect it may be the former - Aon is primarily responsible for administering pension schemes rather than actually providing them), she would need to take regulated advice before going any further.

El_Torro

Legally you can take as much money out of a pension as you like as long as you are old enough to access it, bearing in mind that the more you take the more tax you will pay. 

Some pension providers don't give all the legal options, especially older pension schemes. The way to solve this is to move to a pension provider who does have the option to do what you want to do. 

I assume your partner's pension is a Direct Contribution pension, not a Direct Benefit pension. DB pensions have different rules. 


Since you are a new poster I will add this: Taking a significant amount of money out of a pension to fund a house purchase is a very tax inefficient use of your pension. I hope you have other pensions / arrangements to cover your expenses while retired.

QrizB

Albertsslave said:

My partner (67F) has a private pension pot of a bit over 30K.

Is this a pension from a previous employer? Can you name them (it might help)?

Silvertabby

Is this an old style pension plan?  If so, then it may have valuable safeguarded benefits.  And/or the scheme doesn't offer drawdown.  

Have AON said exactly why they have said 'no' ?

dunstonh

My partner (67F) has a private pension pot of a bit over 30K. She has contacted her pension company (AON) asking to withdraw the funds to her bank account but she was told as the amount was over 30K she could not.

Aon are not a pension company.  They are administrators for occupational pensions.

Surely that can't be correct?

Surely it can.  

 What are the rules as I am also considering the same with a smaller pot. 

You haven't told us the type of pension.   But the response suggests it is either a defined benefit pension or a COMP/CIMP with safeguarded benefits.   Or the pension under administration doesn't offer flexible benefits.

So, what type of pension is it?     You may not know the technical name but a dead give away if its a Defined benefit scheme is if you never get statements showing investments into funds  (how many units held at a unit price giving the total).    Defined contribution schemes are those that hold investment funds that fluctuate daily.   Defined benefit schemes are based on time in service and pensionable salary.     

So, looking a the paperwork you have, does anything like that appear on there?

wjr4

El_Torro said:

I assume your partner's pension is a Direct Contribution pension, not a Direct Benefit pension. DB pensions have different rules. 

It’s ‘defined’ not ‘direct’.