Prudential Pension Process - Cash In

gandalftheking · 15 June 2019 at 11:14AM

First of all the good news! My business has been struggling lately then I discovered a lapsed pension from 30 years ago! Ok, it's not a life changing amount of money, but it will really help me turn the corner re my business.

So my plan is to cash this in in it's entirety.

Now long speeches about entitlements and legal obligations aside which I know they have to do, I was surprised to learn that it'll be until 2nd July before i get my 'pack', with all the options laid out, and even though I know what I want to do (i.e. cash in). I also know i'll have another long and boring phone call while they try to do everything possible to retain some element of the pot in their system.

There is a question, yes - 2 actually!

1. Is this length of time to receive the pack legal or are they pulling a stunt (it'll be 2.5 weeks since I made the call at that point)?

2. Once I get onto their call following receiving the pack to tell them what I want to do, does anyone know how long it takes for them to actually send the money? (I'm guessing a month minimum)

Many thanks in advance

shinytop · 15 June 2019 at 11:26AM

I don't think it's a quesstion of legality or pulling a stunt. I think it's more that's just the way their processes and procedures work. There will be paper forms to be filled, checked and authorised, calculations to be done and checked and then your pack will be sent by internal mail to the post room where it will be collected, eventually, and posted to you. You might count yourself lucky; I have just been quoted 6-8 weeks after I retire to get my 'options pack'. Then another 'several weeks' to process my choice. And it'll all have to be done in writing, on paper. I don't think anything happens quickly in the pensions world.

gandalftheking · 15 June 2019 at 11:28AM

Much appreciated Sir, just double checking

dunstonh · 15 June 2019 at 11:30AM

I discovered a lapsed pension from 30 years ago!

Lapsed means ended without value or benefit. So, I suspect it did not lapse.

1. Is this length of time to receive the pack legal or are they pulling a stunt (it'll be 2.5 weeks since I made the call at that point)?

What exactly is wrong with the timescale? It is within the usual expectation of a legacy insurance company pension.

2. Once I get onto their call following receiving the pack to tell them what I want to do, does anyone know how long it takes for them to actually send the money? (I'm guessing a month minimum)

Probably a bit less than that.

gandalftheking · 15 June 2019 at 11:32AM

lapsed - semantics - i knew what i meant ;-)

timescale - i dont know! thats why I asked the question

thanks for the rely to my third point

zagubov · 15 June 2019 at 12:36PM

shinytop wrote: »

I don't think anything happens quickly in the pensions world.

This is so true, but the OP will have to get used to the glacial speeds eventually.

While you're waiting, here's some thoughts and questions.
3/4 of the total could be taxable, and depending on your other income does this push you into higher rate?
In which case 30% could go to the taxman.
Will the Pru let you taker the money without evidence of you talking to a financial adviser?
If not, do you know how much financial advisers cost?
Are you totally sure that putting the money into your business is the best thing to do?
Because, if not, taking it might be irreversible.
Is there any sort of exit fee to the Pru for taking it all out, aside from the tax?

Sea_Shell · 15 June 2019 at 1:23PM

If these speeds are as glacial as they appear, are you able to start the ball rolling in advance of your 55th birthday???

DH has a small pot with Pru and he'll just want to cash it in in Sept 21.

Albermarle · 15 June 2019 at 1:45PM

I also know i'll have another long and boring phone call while they try to do everything possible to retain some element of the pot in their system.

It's less about trying to keep some of your pot , than covering themselves for any future blowback.
I guess that most people who cash in their pensions haven't given it a lot of thought and just see the £££ signs . Then when they discover that have lost lots in tax, and 10 years down the line the money is spent and no pension to fall back on, they could go back to the pension company and say they should have been warned, and try and sue them or similar . Hence the long and boring warnings and that your responses will be recorded just in case there is any future complaint or request for compensation.

Dazed_and_confused · 15 June 2019 at 2:23PM

Don't forget that the pension company can only deduct based on the emergency tax code.

This is almost certainly going to be a different amount to the tax which will ultimately be payable.

Depending on your personal circumstances you might be due a refund of some of the tax deducted. But you may equally have additional tax to pay when you come to pay your 2019:20 Self Assessment bill in January 2021.

atush · 15 June 2019 at 3:37PM

So are you prepared to lose 20-40% of 3/4 of your pension to tax?

Do you have other pensions? If not, what will you retire on (esp as your business doesnt sound healthy)

Prudential Pension Process - Cash In

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