Transferring pension - fairly urgent- help please!

Dick_here

EdInvestor wrote: »

Maybe better if you save it in your ISA where you can get at it if you need it.

Yeah, spend it now. You might not live to draw it as a pension anyway.

AliceBanned

EdInvestor wrote: »

Yes. The company will deduct the tax relief and the contracted out rebate from the transfer value, contract you back in, and send the remaqinder (your contributions) to do with as you will.



That's it. Maybe better if you save it in your ISA where you can get at it if you need it.

Thanks - I don't have an ISA or any other savings so it will get me started!

AliceBanned

!!!!!!_here wrote: »

Yeah, spend it now. You might not live to draw it as a pension anyway.

Thanks - the amount of worrying I've done over pensions has probably knocked years off my life! You're right, but I'm going to invest it, rather than spend, at last so I can get at it as Ed Investor says.

AliceBanned

Ok so I've decided to cash it in realising this has to be the best way, and gives me more choice with an ISA; Just a question EdInvestor - you say stocks and share ISa - I know it is not always predictable but for pension purposes are you saying this is better than cash ISA? What about a bond? I am with Nationwide and their 1 year fixed rate is 6.50% which I can add to via my flex account. Any good just for starters?

Thanks for any help!

Dick_here

People normally go for S+S over cash for a longer term investment as growth potential is higher. Also, it isn't as easy (psychologically at least) to get the money out - which is what you don't want to do if it's 'pension money'.

dunstonh

Ok so I've decided to cash it in realising this has to be the best way, and gives me more choice with an ISA;

It gives you no additional choice with an ISA. The investment options for a pension and ISA are virtually identical. So, in effect you are throwing money away by usng an ISA if that is the reason you are choosing to do it.

stocks and share ISa - I know it is not always predictable but for pension purposes are you saying this is better than cash ISA?

cash ISAs are for short term money. You tend not to get much real value growth on cash ISAs and they are more suited for retirement planning as you get much closer to retirement. Stocks and shares ISAs are virtually the same as pensions from an investment options point of view. Its just maturity methods that differ.

What about a bond? I am with Nationwide and their 1 year fixed rate is 6.50% which I can add to via my flex account.

Thats not a bond but a fixed term deposit. Nationwide mis-name them as bonds for marketing reasons. Bond sounds better. Its 6.50% before tax but 5.2% after tax and that is not far off the RPI figure (your personal rate may be higher). So, you could be losing money or standing still with that.

AliceBanned

Thanks Dunstoh - my other reason was the complexity of transferring it, and the fact that I could otherwise be reinstated into State Second pension for the 8 months that I paid into this pension, which may be better than having such a piddly little amount in a pension pot on its own - opinion differs so widely I guess because no one knows what the state pension will be worth anyway 25 years down the line. But your post has given me more to think about, thanks; haven't actually posted the form back to Scottish Widows yet to definitely cash the pension in! They are not helping me to transfer the excess into my new pension provider, so it seemed the only option, but I will chase them up again and see what's possible.