Question re pensions

pumpkinmoon

Hello, first post here - please bear with me as know very little about all the pension jargon. My husband has two old company pensions (both frozen) and doesn't have a current company pension. He has decided to take a tax free cash lump sum out of both - one will be £5,110.00 and the other £2,300.00.

The first one has sent him a cheque and a form for HMRC - Pension Enquiry P161 (Man) which seems to be a form to check whether he is paying too much tax.

The other company have sent him the retirement illustration today and he has 30 days to respond. They have sent numerous forms in which we need to list any other pension benefits taken or or after 06.04.06 and they have sent a huge form out as well HMRC CA1550 re NI contributions - Protected Rights -p provisin of pension benefits.

My main question is can we take out the cash lump sums from both with no problems and why has each company sent different forms out? If we needed financial advice roughly how much would it cost?

Thanks for any help - why can't they all be easy to understand??

dunstonh

My main question is can we take out the cash lump sums from both with no problems and why has each company sent different forms out?

It is possible you cannot take the lump sums without commencing an income. Although this option is available (after April 06) it happens on certain types of plans. Typically SIPPs and the better/modern personal pensions. It is probable that both of the schemes you have dont allow it and you would have to transfer them to one that does.

why can't they all be easy to understand??

They are, if you know the subject. However, like anything, if you dont know the subject it wont be easy.

pumpkinmoon

Hi there, thanks for the reply. Hubby will be getting a very small monthly income (pension) from both pensions - one is the grand total of £30.00 after tax each month and the other is about £20.00 a month after tax!!!! Whooppee - don't think I'll be leaving work just yet :rotfl:

EdInvestor

If you just want to take the cash out and leave the rest invested, you´ll need to cancel the arrangments made and start again by first transferring the pensiopns to a SIPP. You can´t transfer the protected rights money until October.

Then you need to put the penion into income drawdown, but without taking an income. The SIPP will then pay out the tax free cash.

Have a look at these webistes for more info;

www.sippdeal.co.uk

www.h-l.co.uk

Ring them up - they will talk you through the process.

jonathon_hart

Hi.

The 2 forms are for different puproses. P161 is to ensure that the correct tax is being deducted going forward (for what it is worth, given the low pension amount). CA1550 is just an administrative form that needs to be filled out for dealing with Protected Rights (monies that are a replacement for the State Second Pension). It is one of the joys of dealing with Protected rights in particular that you are forever filling out forms for the taxman.:rolleyes: