A pension scheme question

lawtz04

Hi guys

Im a mid twenties chap who works for a local government authority.

I've been there for 7 years and have paid into the pension scheme from the start.

Ive been informed that even if I wanted too I couldn't take this money out now. My intention would be to take out what I've paid in so far and start over, using the money to pay off my existing debts on credit card.

Anyone give me a bit more info for this simpleton?

EdInvestor

lawtz04 wrote: »

Ive been informed that even if I wanted too I couldn't take this money out now.

That's correct.Money in pensions can never be withdrawn except as income when you retire.Amazing how many people don;t know this.

That's a good pension scheme you are in though, so even if you could withdraw it, nobody would advise you to do that as you would lose the money from the employer, and the tax relief of course..

seven-day-weekend

The LGPS is one of the best, so stick with it.

You can't take a lump sum of money out of ANY pension until you are 55, and then only about 25%. That's why it's a pension, it is to fund your retirement.

chesky369

You're confusing a pension with a savings scheme. Why should an employer contribute to a savings scheme for you and why should a government give you a tax incentive for one? No, it's for when you're old and grey and not earning any more, so you don't become a burden to society or your family. Perhaps we should go back to the phrase 'old-age pension', so people get the idea.

FPastille

EdInvestor wrote: »

That's correct.Money in pensions can never be withdrawn except as income when you retire.Amazing how many people don;t know this.

That's a good pension scheme you are in though, so even if you could withdraw it, nobody would advise you to do that as you would lose the money from the employer, and the tax relief of course..

The part about "Money in pensions can never be withdrawn" is not entirely accurate. If you have been contributing to an occupational money purchase scheme for less than two years and have not contributed via a salary sacrifice scheme, you should be able to get a refund of employee contributions if the plan trust deed allows it.

Although I do agree with "nobody would advise you to do that as you would lose the money from the employer, and the tax relief of course" as this is a good way to build up your pension fund.

Also, it has been mentioned that "You can't take a lump sum of money out of ANY pension until you are 55, and then only about 25%." When you reach 55 or over you can take 25% a tax free cash lump sum and have the rest paid as an annuity (income)

bigbloke45

So, basically, you've been working for local government since you were about 18. You will have accrued some pension benefit by now, but you can't use it to pay off your credit card debts. So, your real question, I believe is "how do I get myself out of debt?"

I'm afraid there is only one answer; cut down on your spending and use the difference to pay down what you owe.

If you analyse your spending, I'm sure you will find lots of things e.g. video hire, computer games, eating out and take aways that you really could pull back on.

You can still enjoy life without these things; it's your attitude that needs to change! But the good news is, it's not forever, just 'till you've paid for the spending you've already done.

You are not alone with this, believe me!

Good luck with your endeavours!

CAE

The current regulations for LGPS state that you are are unable to have a refund of pension contributions afer three months of joining the scheme.