United Communications Group Pension

Liz65

Hi, my husband has an old pension that he hasn’t paid into for years but it has grown into a decent amount. He asked to take it out as a lump sum but was told he wasn’t able to because he had already exceeded his his lump sum allowance! So he can get a small annual pension only. Is this correct? He is still working so this would probably be taxed as income with his wages. Would he be able to transfer it to his work pension instead? Thank you

Marcon

The jargon is wrong (he'll have been told he's exceeded the limit for trivial commutation because he has more than £30,000 in total from all his private pensions) but the outcome is the same: he can't take the whole lot as cash. He may be able to take some tax free cash, with the rest as taxable income.

Whether he could transfer it to his workplace pension depends on whether the scheme would accept it - and if the transfer value is from a defined benefit scheme (?which I think it is) is £30K or more, he'd have to take mandatory financial advice at a cost of £5K+ before the old scheme could transfer the funds.

Silvertabby

There may be a couple of answers to this question. The reference to exceeding his lump sum allowance would normally mean that he has already taken the maximum tax free cash allowed by HMRC, being £268,000.

Or, more likely, is this a DB final salary scheme ? If so, he would only be able to take it as a one-off commuted lump sum if the notional value of ALL of his pensions, except for his State pension, total less than £30K.

Transferring it to his current works pension will depend on the scheme rules. Your husband could at least ask the question, then he'll be able to fine tune his options.

Marcon

The reference to exceeding his lump sum allowance would normally mean that he has already taken the maximum tax free cash allowed by HMRC, being £268,000.

I'd looked at OP's previous questions before answering - definitely not that:

https://forums.moneysavingexpert.com/discussion/6559482/cashing-in-pension

Silvertabby

https://forums.moneysavingexpert.com/discussion/comment/81956752#Comment_81956752

I didn't think so either, but someone else may have chipped in just to point out that we had overlooked something !

dunstonh

https://forums.moneysavingexpert.com/discussion/6663455/united-communications-group-pension

What are you trying to achieve?

You are a bit all over the place. i.e. wanting to draw it as a lump sum at the start and then transfer it to the works pension at the end. Two very different options.

Liz65

They will not let him draw it all out in one lump sum, so he is wondering if he can transfer it to another pension

QrizB

They will not let him draw it all out in one lump sum, so he is wondering if he can transfer it to another pension

As asked above, what are you trying to achieve?

Why does he want to draw it all out at once?

… my husband has an old pension that he hasn’t paid into for years but it has grown into a decent amount.

How much is "a decent amount"? How much is the "small pension" you refer to him being offered?

Sam_666

Its bad idea to use pension money as cash-cow for ad-hoc pet projects.
Yes, you can transfer pension, but being DC or DB will make difference in cost/options.

Liz65

the pension is about £19,000 and he wants it out to do some work on our house which we can’t afford.

Marcon

Advice isn't mandatory where a cash equivalent transfer value is under £30k. He can set up a personal pension and transfer to that. Check first that the scheme will accept the transfer - not all will if it comes from a defined benefit scheme.