Can I take my pension?

EdInvestor

Hi DH

Firstly I'm not giving smart boy any advice, just explaining an option.

Obviously he should find out how much he would get if he was allowed to activate his pension and take early retirement and tax free cash now.

Depending on the size of that pension income (and other benefits) and how large his transferred fund would be, he can take a view about whether to take the income from the scheme or take the transferred fund into the Sipp and invest it himself.

We don't have enough facts to decide at present. Presumably the scheme is now just going to increase for 15 years @inflation or 5%. Even ignoring the fact that smart boy needs the money now, it's not hard to get a fund to do better than that.

dunstonh

We know nothing about the occupational scheme though. There will often be retained benefits within the occ scheme which cannot be matched by personal arrangements. On top of that, he is going to lose £46k alone on transfer. It would take some time to make that up, if ever.

Occupational pensions 99 times out of 100 are better off being left in the occupational scheme.

As its an occupational scheme transfer, the receiving scheme is almost certainly going to insist on it coming through an advice channel rather than DIY. I don't see many IFAs willing to transfer him (based on limited information posted so far). As you say though, we don't know enough and are very unlikely to ever do so.

oceanblue_3

"I would take the money and run off with this immediately, if you have a house worth 850k you can afford to take a 46k hit and get this pension lump sum working for you, so you can make the money back through investing it.

If it were me I would move it to a low cost online SIPP ( Self invested personal pension), taking whatever tax free cash is available on the way out. I would then put it into income drawdown, investing it so as to take an income from the yield ( investment return on the fund), leaving the capital itself to grow.[You can take more than this, which could be helpful in your current situation, but I wouldn't advise it doing it for very long, unless of course you are good at investing and your fund makes good returns - which is quite possible. ]"

I think this constitutes advice, "Editor", despite what you say to the contrary. Two points:

1) what's your take on the FSA's "Treating Customers Fairly" initiative?

2) to what extent have Critical Yield considerations influenced your suggestions for smart boy?