Taking out of civil service pension ?

archer_66

Hi I know some pensions you can take your money out of. My daughter has been with the civil service for just over two years. She never opted into the pension and she was never told who it was with until today . She spoke to the Manchester company who holds it and they’ve said it’s locked for 25 years . Is there anyway she can take money out ? 

If she transfers it to somewhere like the people’s pension then is this a way around it ? 

ellenvan

If the civil service scheme is based on final salary it is never a good idea to opt out or transfer.
Civil service pensions are usually so good, index linked etc .
Do you have any more details of the pension and benefits?

Emmia

archer_66 said:

Hi I know some pensions you can take your money out of. My daughter has been with the civil service for just over two years. She never opted into the pension and she was never told who it was with until today . She spoke to the Manchester company who holds it and they’ve said it’s locked for 25 years . Is there anyway she can take money out ? 

If she transfers it to somewhere like the people’s pension then is this a way around it ? 

If she's a CS she's presumably enrolled in the Alpha pension scheme, which is a defined benefits scheme - there's no "pot" to take out.

A DB scheme offers a guaranteed income (indexed linked) for life from retirement age. Is she leaving the CS? Why has the question about moving it /taking it out arisen?

The CS pension is one of the best that you can get - her enrollment isn't a bad thing.

nakie999

Unfortunately, most civil service pensions are pretty locked in until retirement, especially if it’s a defined benefit scheme. Even if she transfers to another pension provider like People’s Pension, she usually can’t access it earlier  it just moves the fund, it doesn’t release it

Emmia

ellenvan said:

If the civil service scheme is based on final salary it is never a good idea to opt out or transfer.
Civil service pensions are usually so good, index linked etc .
Do you have any more details of the pension and benefits?

They're not final salary these days, it's average earnings.

ellenvan

Even if based on average earnings - not something to want to opt out of!

Emmia

ellenvan said:

Even if based on average earnings - not something to want to opt out of!

Agreed.

This does seem to be on the wrong board, it should be on the pensions board rather than the redundancy board.

dunstonh

Hi I know some pensions you can take your money out of. 

Only when you get page age, which is typically 55 (rising to 57 but some schemes may have slightly earlier ages possible), short service refunds or death.

he spoke to the Manchester company who holds it and they’ve said it’s locked for 25 years . Is there anyway she can take money out ? 

You say she works for the civil service. That would be a public sector pension scheme and is not with a company.

And no, she cannot access the money unless she is over 55.

If she transfers it to somewhere like the people’s pension then is this a way around it ? 

No.  Legislation apples to all providers and schemes and there is no provider that is exempt from UK law.

 She never opted into the pension 

Yes she did.   Everyone is opted in by default.   What you mean is that she never opted out.  She was very sensible not to opt out.   

Marcon

nakie999 said:

Unfortunately, most civil service pensions are pretty locked in until retirement, especially if it’s a defined benefit scheme. Even if she transfers to another pension provider like People’s Pension, she usually can’t access it earlier  it just moves the fund, it doesn’t release it

Why is that unfortunate? Pensions are long-term savings vehicles designed to provide financial security in old age.

You don't have to retire to take your benefits - just reach the minimum age for accessing your pension (which applies to both DB and DC schemes).

If this lady is in the main DB scheme, then she can't transfer it except to another DB arrangement - and the People's Pension isn't a DB scheme.

OP, I suspect that what you have in mind is where someone has been a member of a DB scheme for under two years and may therefore be entitled to a refund of their own contributions when they leave, or a transfer to another registered pension scheme. Be aware that there are two downsides to taking a repayment: the repayment is taxed (non-recoverable), and the person concerns misses out on a slug of cash from the employer. So although the answers here won't be what you/she wanted to hear, she now has the considerable benefit of a 'deferred' pension which will increase every year until she comes to draw her benefits.

Emmia

@archer_66 what are you or your daughter seeking to achieve in trying to withdraw the money from the pension?

katejo

As soon as I started my university job, my Dad told me to pay into the DB pension scheme. So glad i did. It means I can retire very soon and not wait to 67. Why does your daughter want to opt out?