Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • MSE Amy
    • By MSE Amy 1st Oct 13, 3:01 PM
    • 28Posts
    • 36Thanks
    MSE Amy
    Release pension cash
    • #1
    • 1st Oct 13, 3:01 PM
    Release pension cash 1st Oct 13 at 3:01 PM
    Hi!

    This is the discussion thread for the


    Click reply below to discuss. If you havenít already, join the forum to reply. If you arenít sure how it all works, read our New to Forum? Intro Guide.
    Last edited by MSE Amy; 05-11-2013 at 3:13 PM.
Page 1
  • marieltroake
    • #2
    • 2nd Oct 13, 10:49 AM
    • #2
    • 2nd Oct 13, 10:49 AM
    I wish I hadn't been conned into doing this!!! I have lost £14k of my pension pot in a year! Just logged a fraud case, but I doubt I will see any of my money again. If I can' t move my last £6.4K, I will have lost the whole of my £20.5k pension pot :-(
  • SarahK
    • #3
    • 2nd Oct 13, 11:10 AM
    • #3
    • 2nd Oct 13, 11:10 AM
    I've read up a fair bit about pension unlocking, but there are still a few points I'm unclear about. Are there any legit options at all to people under the age of 55? Somewhere I remember reading that cases of financial hardship were looked at. I realise all the downsides to releasing the funds early, but just wanted to make sure I had the full picture
    • dunstonh
    • By dunstonh 2nd Oct 13, 11:37 AM
    • 98,597 Posts
    • 67,041 Thanks
    dunstonh
    • #4
    • 2nd Oct 13, 11:37 AM
    • #4
    • 2nd Oct 13, 11:37 AM
    Are there any legit options at all to people under the age of 55?
    No. Plus, that would not be unlocking.

    Somewhere I remember reading that cases of financial hardship were looked at.
    No they are not.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Ex GE worker
    • #5
    • 2nd Oct 13, 6:51 PM
    Pre 55 pension
    • #5
    • 2nd Oct 13, 6:51 PM
    If the pension scheme rules allow, you can take your pension before 55. I took my GE pension at 50 as I now work for another company. (I pay in to my new employers scheme now)
    • RichandJ
    • By RichandJ 2nd Oct 13, 6:55 PM
    • 1,047 Posts
    • 922 Thanks
    RichandJ
    • #6
    • 2nd Oct 13, 6:55 PM
    • #6
    • 2nd Oct 13, 6:55 PM
    If the pension scheme rules allow, you can take your pension before 55. I took my GE pension at 50 as I now work for another company. (I pay in to my new employers scheme now)
    Originally posted by Ex GE worker
    That was because you either:

    a) had a protected retirement age;

    b) took it before 6/4/10, or;

    c) took it on ill health grounds.

    Working for someone else is irrelevant.
    It only takes one tree to make a thousand matches, it only takes one match to burn a thousand trees. As well, the cars are all passing me, bright lights are flashing me.

    Johnny Was. Once.

    Why did he think "systolic" ?
  • Ex GE worker
    • #7
    • 2nd Oct 13, 7:57 PM
    pre 55
    • #7
    • 2nd Oct 13, 7:57 PM
    As I stated, my GE rules allowed this. Other people must also be in this position.
    I was pointing out that being under 55 does not absolutely prevent taking a pension
    • mania112
    • By mania112 2nd Oct 13, 8:59 PM
    • 1,949 Posts
    • 745 Thanks
    mania112
    • #8
    • 2nd Oct 13, 8:59 PM
    • #8
    • 2nd Oct 13, 8:59 PM
    One cannot say that you are allowed to take a pension pre-55, because those that can are in existing company schemes only.

    The theory being, I suppose, that those that can take benefits early already know and we don't want to confuse the 95% others that have to wait to 55.

    The main pre-55 caveat we should make folks aware of is terminal/severe illness and that will almost always be at the discretion of the trustees.
    • dunstonh
    • By dunstonh 2nd Oct 13, 9:27 PM
    • 98,597 Posts
    • 67,041 Thanks
    dunstonh
    • #9
    • 2nd Oct 13, 9:27 PM
    • #9
    • 2nd Oct 13, 9:27 PM
    As I stated, my GE rules allowed this. Other people must also be in this position.
    I was pointing out that being under 55 does not absolutely prevent taking a pension
    Originally posted by Ex GE worker
    A small minority of cases have a protected scheme age. So whilst you are correct in your case and worth a note for those with protected scheme ages, it really is a very small number and it shouldnt confuse or give false hope to others.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Ex GE worker
    pre 55
    Having just spent 5 hours reading the other forum posts, I realise how lucky I am!
    (The GE pension trustees were happy to get my pension dealt with rather than have it as a future liability to the fund)
  • jamesd
    Are there any legit options at all to people under the age of 55?
    Originally posted by SarahK
    Yes:

    1. Some pension schemes have preserved younger ages.
    2. Some schemes for particular jobs like athletes can have much younger ages than usual as special cases.
    3. If you are diagnosed as likely to die within a year you can normally take the whole pension pot as a lump sum.
    4. If you are believed to be medically unable to work for the remainder of your normal working age it may be possible to take a severe ill health pension income and usual lump sum.
  • IanGD
    Swiss Pension
    Hi, I have a Swiss Pension held there for me. What can I do and what do I have to be aware of to release it? (I am over 60)
    • xylophone
    • By xylophone 7th Oct 13, 10:16 PM
    • 30,904 Posts
    • 19,096 Thanks
    xylophone
    https://www.gov.uk/living-in-switzerland
    Anything here?
  • jonnybravo160
    hi there, i recently heard on the radio, a company offering to release pension funds. the company name escapes me but it got me thinking anyway.

    i have 2 frozen group personal pensions, from previous employers, with less than £5000 in each, what are my options in accessing this fund? im 33 years old

    thanks in advance
    • atush
    • By atush 14th Jan 14, 9:43 PM
    • 17,868 Posts
    • 11,355 Thanks
    atush
    There is a sticky at the top of the main page.

    No you can't and they are scammers.
    • BethanyD
    • By BethanyD 14th Jan 14, 9:46 PM
    • 108 Posts
    • 54 Thanks
    BethanyD
    This is generally a con unless you're advised by a FCA regulated person.

    My mum was contacted last month by a Manchester outfit called Platinum Review who told her they were calling from a government agency!!

    Run by some guy called Kamran Rachid who alos runs Rainbow Claims (ambulance chasers)

    All sounds very dodgy and a huge scam
  • DAVEJHALL
    Hi
    I am 55, in full time employment and contribute to an active DB pension.
    I am considering liberating 4 pensions that were frozen when I left each employer. One of them is a final salary pension.
    I have received transfer values for these pensions and the pot is circa £250k.
    I would take 25% as a lump sum.

    What are the options available to me for the balance?
    I don't like the idea of an annuity. Mainly because it is a one off decision.
    I would prefer a more flexible option and I have fixed term/rate savings accounts, cash ISAs and such like in mind.
    I have had some discussions with an Independent Financial Advisor and have been happy with the advice so far ... Over the phone.
    We now need a face to face and discussed fees.
    Is 3% for the first £175k of my pot, a lesser rate (not yet defined) for anything above that figure. I see this advice and service could cost over £7k. Seems quite an expensive consultation... Is It?

    My position is that; I have a mortgage that runs until I am 70yrs old.
    I wish to pay off some of the capital to a point that the mortgage completes before I am 65....my current plan is to pay off £30k and complete mortgage at 62. Using a tool from this site I can save in the region of £25k in interest alone by doing this.
    I also plan to pay off other debt (loans x2) and credit cards.
    I would then invest any income generated my pot into ISAs on an annual basis for the ten years left of full time employment.

    My calculations indicate that this course of action will benefit me more over the next ten years than to sit and do nothing.
    Not just the long term, but immediately by reducing my current (manageable) debt.....

    The forums thoughts would be appreciated.

    Thanks
    • Linton
    • By Linton 21st Jan 14, 7:55 AM
    • 11,176 Posts
    • 11,571 Thanks
    Linton
    Hi
    I am 55, in full time employment and contribute to an active DB pension.
    I am considering liberating 4 pensions that were frozen when I left each employer. One of them is a final salary pension.
    I have received transfer values for these pensions and the pot is circa £250k.
    I would take 25% as a lump sum.

    .......
    My position is that; I have a mortgage that runs until I am 70yrs old.
    I wish to pay off some of the capital to a point that the mortgage completes before I am 65....my current plan is to pay off £30k and complete mortgage at 62. Using a tool from this site I can save in the region of £25k in interest alone by doing this.
    I also plan to pay off other debt (loans x2) and credit cards.
    I would then invest any income generated my pot into ISAs on an annual basis for the ten years left of full time employment.

    My calculations indicate that this course of action will benefit me more over the next ten years than to sit and do nothing.
    Not just the long term, but immediately by reducing my current (manageable) debt.....

    The forums thoughts would be appreciated.

    Thanks
    Originally posted by DAVEJHALL

    Taking a DB pension early is often a bad idea, as is taking the 25% from a DB pension if that can be avoided. The reason is that the DB scheme is required to pay you the full DB pension at the retirement age, anything outside that would probably only be done if it is not to the detriment of the scheme and so is often not generous.

    Taking a pension early to pay off a mortgage also may not be a good idea. You could find, particularly at the moment, that the return you are getting on your DC pension is higher than the interest costs of the mortgage. If not, that could be good evidence of a need for you to look at changing your DC pension arrangements.

    The only part of your plan that, on the face of it, looks sensible would be to pay off non-mortgage debt if that is at a high rate of interest.

    However it all depends on the detailed numbers. Perhaps it would be worthwhile if you looked carefully at these, possibly with the assistance of your IFA.
  • jamesd
    I am 55, in full time employment ... My position is that; I have a mortgage that runs until I am 70yrs old.
    I wish to pay off some of the capital to a point that the mortgage completes before I am 65....my current plan is to pay off £30k and complete mortgage at 62. Using a tool from this site I can save in the region of £25k in interest alone by doing this.
    Originally posted by DAVEJHALL
    Your objective doesn't make sense and it appears financially irresponsible. You save the mortgage interest but you've ignored your investment loss over the same time. It's very easy: paying off a mortgage with a pension lump sum makes you worse off unless you planned that when you set up the pension, as part of the plan to clear an interest only mortgage.

    The UK's main stock market has grown at an average of 5% plus inflation a year for the last hundred plus years, around 8-9% including inflation. It is very unlikely that you have a mortgage that's costing you more than 8% a year in interest and that's what it would take for you to be better off by using a pension lump sum to clear a mortgage.

    If you wanted to cut the time to clear the mortgage a less costly way would be to invest the lump sums via a S&S ISA and take income from that and the pension pots to pay part of the mortgage cost and overpay. This way you only have the reduced pension income until the mortgage is cleared, not for life as you do if you spend the lump sums. It's far more efficient than your original plan.

    I also plan to pay off other debt (loans x2) and credit cards.
    Originally posted by DAVEJHALL
    What are the interest rates? Are you already using 0% deals to make these interest free? If not, doing that is a much less costly way than taking money from a pension pot.

    You're also throwing away a significant part of your chance to retire earlier. It's good, not bad, to have a mortgage that runs after state pension age if you want to retire early. As you get older you reach the date when you can take defined benefit pensions like final salary without any reduction in income, so your potential income goes up. Later, the state pensions start and you get an income boost that way. Retiring before those ages your challenge is to generate an income that's higher than your long term need because you have to top it up to the level that you'd have if those were in payment. You make that harder if you blow lump sums on a dream of clearing a mortgage, because that's money you could have used to boost your income when you need it most. Do you have an objective to retire early or are you content to act in a way that makes it later than it has to be just to see the mortgage gone earlier, unnecessarily?

    I am considering liberating 4 pensions that were frozen when I left each employer. One of them is a final salary pension.
    Originally posted by DAVEJHALL
    Forget the final salary pension. It's almost never a good idea to transfer one of these to take a lump sum. If you take it early you lose too much income. If you take it when you can and if it offers a lump sum normally, the lump sum normally costs you more in lost income than the value of the lump sum due to a poor commutation rate. The time to take a defined benefit pension is the normal retirement age for the pension. The best amount to take in a lump sum is almost always zero unless your health is poor. Anything else is best done by using the higher income to do the paying, so you get the higher income for life, not just for the duration of the debt you're clearing.

    I normally tell people to borrow money to avoid taking a final salary pension early if they need extra income for a while, because it makes them better off. Doing it the other way around doesn't make sense.

    I have had some discussions with an Independent Financial Advisor and have been happy with the advice so far ... Over the phone.
    We now need a face to face and discussed fees.
    Is 3% for the first £175k of my pot, a lesser rate (not yet defined) for anything above that figure. I see this advice and service could cost over £7k. Seems quite an expensive consultation... Is It?
    Originally posted by DAVEJHALL
    Yes, because it's not needed except for a defined benefit pension and it's unwise to do it for a defined benefit pension.

    For the defined contribution pensions you can do it yourself at minimal cost. Plenty of DIY providers around who will take a transfer and let you take a 25% tax free lump sum. The usual charge for this is on a DIY basis is no more than a few hundred Pounds to start drawdown.

    What are the options available to me for the balance?
    I don't like the idea of an annuity. Mainly because it is a one off decision.
    I would prefer a more flexible option and I have fixed term/rate savings accounts, cash ISAs and such like in mind.
    Originally posted by DAVEJHALL
    There's no need to buy an annuity, that requirement was abolished back in 2006. You can use Capped Income Drawdown. This lets you take the lump sum and then draw an income that is capped by something called the GAD limit, currently around 6-7% at your sort of age, it goes up as you get older. You generate the income by investing the money, just as you already to in defined benefit pensions.

    You can combine that by investing the tax free lump sum inside a S&S ISA to generate tax free income.

    Do those and you can choose to use that income on the mortgage or other debt but without the long term loss that comes from spending the lump sums to do it.
  • leebass
    Hey,

    I've recently lost all wares - it's a long story - so currently relocating and starting off anew, completely. I understand the implications of having no pension to fall back on etc but all the same, I'll tell you my details:

    I worked for a borough council, at the time Government run before privatisation took over, I remained in that role for 3 years and haven't paid into a pension scheme since. As far as early withdrawal goes, it would greatly assist me in life right about now, I'd like to go for my C class license for a start so....is there a decent, legitimate way to do this?
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,880Posts Today

8,219Users online

Martin's Twitter