Prudential Works Pension ?

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
14 replies 1K views
joe2cooljoe2cool Forumite
3.6K Posts
Part of the Furniture 1,000 Posts Photogenic
✭✭✭✭
Hi just wondered if anyone could help I have personal pension with Prudential which I paid into for just over a year & was wondering about cashing in ?

Not sure if possible ? I have have a pension with NHS & Social Care.

Appreciate any help

Thx
joe2cool
«1

Replies

  • dunstonhdunstonh Forumite
    106.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    You cant cash a pension in. It has a value which can be matured between the ages of 50-75. The maturity allows 25% tax free lump sum with the remainder being used to purchase an annuity.

    Annuity rates are based on age and options. Ideally, you want to leave this to at least over 60 to get the best rates.

    You could investigate transferring the pension into the NHS scheme. There are pros and cons depending on your circumstances.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • joe2cooljoe2cool Forumite
    3.6K Posts
    Part of the Furniture 1,000 Posts Photogenic
    ✭✭✭✭
    I thought as much ..........appreciate your help..........
    joe2cool
  • EdInvestorEdInvestor
    15.7K Posts
    ✭✭✭✭✭
    The maturity allows 25% tax free lump sum with the remainder being used to purchase an annuity.

    Alternatively you can transfer the remainder into an income drawdown scheme which will allow the fund to keep growing while you take an income and enable you to retain control of the capital and leave it to your heirs.
    Trying to keep it simple...;)
  • dunstonhdunstonh Forumite
    106.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    Arrrghhh ;)
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • EdInvestorEdInvestor
    15.7K Posts
    ✭✭✭✭✭
    dunstonh wrote:
    Arrrghhh ;)

    Just thought it would be sensible to point that out - in the run-up to the changes next year, people should be advised of the new options.

    You can easily see a wave of misselling cases emerging post A-day, particularly involving annuities, which are irrevocable, if people haven't been advised of the alternatives.

    Frankly the current way people advise on drawdown (which is not based on clear-cut guidelines from the FSA) is very questionable IMHO in the light of the arrival of the new cheap online SIPPs.
    Trying to keep it simple...;)
  • dunstonhdunstonh Forumite
    106.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭

    You can easily see a wave of misselling cases emerging post A-day, particularly involving annuities, which are irrevocable, if people haven't been advised of the alternatives.

    I cant see a wave of misselling at all. Especially on annuities which are sold on the basis of risk.

    Its funny how we have a wave of endowment complaints from people saying they are too risky, yet you think that these same people would be interested in drawdown.
    Frankly the current way people advise on drawdown (which is not based on clear-cut guidelines from the FSA) is very questionable IMHO in the light of the arrival of the new cheap online SIPPs.

    Seeing as you do not do drawdown and have not experienced a drawdown transaction and drawdown is very much a minority transaction on retirement, what do you base your opinion on?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • EdInvestorEdInvestor
    15.7K Posts
    ✭✭✭✭✭
    dunstonh wrote:
    Its funny how we have a wave of endowment complaints from people saying they are too risky, yet you think that these same people would be interested in drawdown.

    You can make a misselling complaint about any financial product, not just endowments.Before endowments, the majority of misselling involved pensions.
    Seeing as you do not do drawdown and have not experienced a drawdown transaction....

    Wrong.
    Trying to keep it simple...;)
  • PalPal Forumite
    2.1K Posts
    ✭✭✭✭
    So you are suggesting that someone who only paid into their personal pension for about a year should consider a SIPP and drawdown? Just how big do you think their pension pot is currently going to be?

    If their earnings are above the earnings cap (£105k) their pension might be worth about £40k, but is almost certainly going to be much less than that.

    I have no problem with you repeating your SIPP/Drawdown mantra when it is relevant, but try and use your head before blurting it out on every thread. It is fast becoming a form a spam, and we all know what happens to that.

    Of far more relevance is that if Joe is aged over 50/55 he might be able to retire with it immediately and trivially commute for cash, particularly after the rules change post April 2006.

    Joe - how much is the fund worth and how old are you?
  • PalPal Forumite
    2.1K Posts
    ✭✭✭✭
    A rewording of your previous statement:
    The maturity allows 25% tax free lump sum with the remainder being used to purchase an annuity.

    Alternatively you can transfer the remainder into an income drawdown scheme which will allow the fund to keep growing or falling in value while you take an annual income that might be higher or lower than available from purchasing an annuity and enable you to retain control of what might be left of the capital while spending your time keeping an eye on your investments (or paying for an IFA to do it for you) and crossing your fingers that they do well so that you can possibly leave some or all of it to your heirs.

    I am more than happy for you to use the above wording in any thread you like. ;)
  • EdInvestorEdInvestor
    15.7K Posts
    ✭✭✭✭✭
    Pal

    Bear in mind that people are thinking of flinging tens/hundreds of thousands of pounds into SIPP pension funds annually when the rules change next year.

    What I say may not apply to the OP in this thread, but there are many people coming up to retirement now - the large babyboomer generation - to whom it may well apply.In addition the rules are changing next year: complusory annuities will be dropped.

    Is there any harm in trying to avoid misselling in advance?

    We already have one thread in this forum from someone asking if they can reverse an annuity purcahse because the person thinks they got a bad deal.

    It's not hard to see that this could become a trend, because when they think about it, people get very annoyed at the idea of giving all their hard-earned away to an insurance company.

    If it hasn't even been mentioned to them that there is an alternative (albeit that it may be quite unsuitable) then you can easily see trouble ahead - and I believe this is happening, particularly with the Pru (which is why I mention it on this thread, as many public sector employees have Pru AVCs.)

    Just trying to save you lot from yourselves, that's all, as you (not speaking personally of course) seem to walk into one misselling pit after another, causing a large amount of hassle and worry for people getting it all sorted out.:(
    Trying to keep it simple...;)
This discussion has been closed.
Latest MSE News and Guides

A guide to council tax bands

Lower your band & save £1,000s

MSE Guides

Cinema MoneySaving tips & tricks

Including year's 2for1 movies for £1

MSE Deals