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  • FIRST POST
    • MSE Amy
    • By MSE Amy 1st Oct 13, 4:01 PM
    • 28Posts
    • 36Thanks
    MSE Amy
    Release pension cash
    • #1
    • 1st Oct 13, 4:01 PM
    Release pension cash 1st Oct 13 at 4:01 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 4:13 PM.
Page 5
    • returners5
    • By returners5 27th Oct 15, 12:58 PM
    • 4 Posts
    • 2 Thanks
    returners5
    I would make sure I stayed in the 25% band.

    Incidentally is that 25% of that pension fund, or 25% of the sum of my different pension funds. (but I would only want to draw from one of them).
    Last edited by returners5; 27-10-2015 at 1:00 PM.
    • Linton
    • By Linton 27th Oct 15, 1:10 PM
    • 9,384 Posts
    • 9,519 Thanks
    Linton
    I am over 55 and want to make a large purchase, which would normally require a loan - which I can get at 7.5% interest.

    Instead of taking a loan and pay interest would it make sense to take the tax free portion allowed from my pension and use that (it's not a final salary pension). Then pay the equivalent of the loan payments as an AVC to my pension until retirement - I believe these payments would also be tax free (deducted from my gross salary before tax if calculated).

    I lose the difference between the 7.5% interest and the return on the pension fund - but I gain the equivalent of the tax on this sum (I am a higher rate tax payer).

    Does this work, and is it legal?
    Originally posted by returners5
    On the basis the pension is Defined Contribution and not Defined Benefit, in principle I believe it works, is legal, and seems reasonable to do. However if the pension you are proposing to take the 25% from is your current employers pension you would need to discuss what you want to do with the pension administrator. I would have thought it unlikely that such a pension would support taking an early lump sum,. If it cant then you would need to transfer the whole pension elsewhere which could cause problems - eg do the rules permit it without you leaving the pension scheme, which obviously isnt what you want to do.
    • Linton
    • By Linton 27th Oct 15, 1:15 PM
    • 9,384 Posts
    • 9,519 Thanks
    Linton
    I would make sure I stayed in the 25% band.

    Incidentally is that 25% of that pension fund, or 25% of the sum of my different pension funds. (but I would only want to draw from one of them).
    Originally posted by returners5
    The 25% is 25% of ech pension involved individualy - ie one pension cant pay another pensions 25%.
    • PensionTech
    • By PensionTech 28th Oct 15, 10:16 AM
    • 710 Posts
    • 926 Thanks
    PensionTech
    returners5, you would need to make sure that you don't fall foul of recycling rules:

    http://www.hmrc.gov.uk/manuals/rpsmmanual/RPSM04104920.htm

    If you did then you would be facing hefty tax charges.
    I am a Technical Analyst at a third-party pension administration company. My job is to interpret rules and legislation and provide technical guidance, but I am not a lawyer or a qualified advisor of any kind and anything I say on these boards is my opinion only.
    • nimac20
    • By nimac20 11th May 16, 12:13 PM
    • 16 Posts
    • 0 Thanks
    nimac20
    I fell for one of these scams, so annoyed about it, really let myself down. Things are going wrong with thw oversea investment and returns are rubbish, will end of costing me money.

    I've bitten the bullet and contacted the FCA this morning to find out what to do. They asked for some more info on the IFA involved so getting that and will contact then back tomorrow.

    Does anybody have any experience of these pension scams. Some of the websites i've seen state you will have to pay 55% tax on the pension. How exactly does this work? I don't have the money to pay it back in one lump sum?

    I would appreciate only constructive replies if possible, i know i've been an idiot and shouldn't have done it.
    • dunstonh
    • By dunstonh 11th May 16, 1:32 PM
    • 92,613 Posts
    • 59,931 Thanks
    dunstonh
    Does anybody have any experience of these pension scams. Some of the websites i've seen state you will have to pay 55% tax on the pension. How exactly does this work? I don't have the money to pay it back in one lump sum?
    I have reported several to the regulator and the individuals to HMRC.

    most of them dont involve any regulated individual. If that is the case, then you normally end up with little or nothing back from the pension and can be hit with a tax bill from HMRC. if there was a regulated individual involved then it is still hard work if the individual was only used to put the SIPP in place (some of the scams have moved to SSAS). There have been a few successful complaints against regulated individuals but not many.

    Did you actually use an IFA? Remember that the scammers will lie to you. They may call themselves all sorts of titles but doesnt mean they are. Have you checked the FSA register to see if that person was actually a real IFA? If they are on there, then you have some small hope. If they are not on there then you are looking at near total loss with no consumer protection likely.
    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.
    • nimac20
    • By nimac20 11th May 16, 2:31 PM
    • 16 Posts
    • 0 Thanks
    nimac20
    Thanks dunstonh

    The business the IFA was working for went into liquidation in 2014. I've searched the FSA register and the person with that name is listed as inactive and the company is not registered.

    The company used to set up the SIPP is registered. Not looking good!

    I really want to get this sorted and if i have to pay a tax bill then so be it. My issue is i'm not sure who to contact to discuss the issue of the tax bill. I've trawled the HMRC website but can't find a department who would deal with this. Can you suggest anything here?
    • dunstonh
    • By dunstonh 11th May 16, 3:41 PM
    • 92,613 Posts
    • 59,931 Thanks
    dunstonh
    The business the IFA was working for went into liquidation in 2014. I've searched the FSA register and the person with that name is listed as inactive and the company is not registered.
    Ahh, the all too common dodgy process of setting up, sell a load of dodgy stuff in the short term and then close down before all the **** hits the fan leaving the liability to the FSCS. The FSCS is funded by levies on firms who have existed for more than a year. It is a system where the good pay for the bad.

    You need to get in contact with the FSCS and start the process with them.
    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.
    • dunstonh
    • By dunstonh 15th Jul 16, 4:12 PM
    • 92,613 Posts
    • 59,931 Thanks
    dunstonh
    Read the post and thought I'd share with you what a personal friend of mine has achieved.
    If you look at the scam warnings issued by the various regulators, what you have described fits a number of those.

    The board removed the last post you made (which was identical to this). So, I guess they felt it was a scam/spam too.
    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.
    • AnotherJoe
    • By AnotherJoe 15th Jul 16, 4:38 PM
    • 9,406 Posts
    • 10,393 Thanks
    AnotherJoe
    This particular vehicle showing a 3 year track record of over 30% pa. enabling me to receive over 3% per month income with a capital guarantee.
    ---------

    I'm in two minds as to whether to feel sorry for anyone who believes that and subsequently loses a shed load of money, or that they deserve everything they get (which won't be much)

    There was a paper published by a professor recently on scams, postulating that the reason these type of outlandish profits are promised is to weed out all but the utterly naive and stupid.
    • Hammouda
    • By Hammouda 9th Jul 17, 11:56 PM
    • 1 Posts
    • 0 Thanks
    Hammouda
    Over 55 cash Unlocking
    Hi,
    I am about to apply for a 25% cash in fro, my private pension. Can I do this by filling out forms by myself and where can I find this information. Otherwise, could you suggest a reliable and cost effective firm.
    Many thanks,
    • Malthusian
    • By Malthusian 10th Jul 17, 10:33 AM
    • 4,095 Posts
    • 6,412 Thanks
    Malthusian
    Assuming you only want the 25% tax free lump sum, you need to convert your pension to an income drawdown plan. Your current provider may allow this or if they don't you may have to transfer it to one that does.

    You can DIY all this unless you have safeguarded benefits worth more than £30,000, in which case you will have to take advice. Even if you don't have to, you should seriously consider taking advice from an IFA to make sure that what you are doing is the most sensible option. When you are handling thousands of pounds the benefits can easily outweigh the cost.

    The Government's Pensionwise service may be a good starting point.
    • bionictadpole
    • By bionictadpole 21st Feb 18, 3:14 PM
    • 3 Posts
    • 0 Thanks
    bionictadpole
    Cashing in my Pension
    I have a pension with an old employer, that has a protected age of 50. (This would be due in 2 years time.)

    The amount that it will grant me each year is negligible and I asked the pension administrator for a figure to cash in early due to ill health. They are refusing to give me a figure without signing various forms for access to medical records/agreeing to be poked and prodded etc.

    All I want is a figure to be able to decide if I want to go down that route or not with various tax/benefit issues to take into consideration. Are they in the wrong or do I have to submit to yet more humiliation just to get a figure I might not act on anyway?
    • dunstonh
    • By dunstonh 21st Feb 18, 4:15 PM
    • 92,613 Posts
    • 59,931 Thanks
    dunstonh
    The amount that it will grant me each year is negligible and I asked the pension administrator for a figure to cash in early due to ill health. They are refusing to give me a figure without signing various forms for access to medical records/agreeing to be poked and prodded etc.
    That would suggest that there is not a protected scheme age or they are misinterpreting the request and are checking you for a serious illness claim. Possibly as you are not 50 yet, the serious illness claim is more likely.

    What type of pension is it? I mean, if its money purchase, then you dont need special figures supplied. Just look at the current value and go by that.
    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.
    • Silvertabby
    • By Silvertabby 21st Feb 18, 6:40 PM
    • 2,736 Posts
    • 3,913 Thanks
    Silvertabby
    If there are benefits to taking the pension before your NRA on ill health grounds (ie, no reductions for early payment in the case of a deferred DB pension) then they are unlikely to quote hypothetical figures.

    Try asking for quote as at 50 (assuming that is your NRA) as that should give you a worse possible case scenario.
    Last edited by Silvertabby; 21-02-2018 at 6:42 PM.
    • maw9960
    • By maw9960 28th Feb 18, 11:04 AM
    • 4 Posts
    • 0 Thanks
    maw9960
    cashing in pension
    I have found a small pension which I have decided to cash in early
    . I am 57 and have been unemployed for just under a year. The value is approx £13k, I believe if I cash this in I will not pay tax due to me being unemployed this financial year. Is this correct?.
    • cloud_dog
    • By cloud_dog 28th Feb 18, 11:22 AM
    • 3,687 Posts
    • 2,186 Thanks
    cloud_dog
    I have found a small pension which I have decided to cash in early
    . I am 57 and have been unemployed for just under a year. The value is approx £13k, I believe if I cash this in I will not pay tax due to me being unemployed this financial year. Is this correct?.
    Originally posted by maw9960
    If you have no taxable earnings this year then you will be able to take 25% of the £13k tax free (£3250), and as the remainder (£9750) is less than the £11500 personal income allowance for 17/18 it will ultimately be tax free.

    'Ultimately' because as this is a first withdrawal the pension company is likely to apply standard or emergency PAYE codes. You will simply contact HMRC and explain and they will 'refund' any tax taken.

    EDIT: Are you in receipt of any benefits? If you are then the drawing of the pension may have a bearing on these or the amounts involved.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • maw9960
    • By maw9960 2nd Mar 18, 9:03 AM
    • 4 Posts
    • 0 Thanks
    maw9960
    No benefits, currently living off my savings.
    • cloud_dog
    • By cloud_dog 2nd Mar 18, 9:38 AM
    • 3,687 Posts
    • 2,186 Thanks
    cloud_dog
    No benefits, currently living off my savings.
    Originally posted by maw9960
    Are you entitled to any, or does your financial situation (i.e. savings) restrict you from claiming any?

    Also, please note, (I'm not an expert in benefits but...) if you are not signing on as unemployed you will not continue to be credited with NI and therefore will not be adding to your state pension 'pot'.

    To answer your original question, it looks like you can draw it all tax free (although you may need to reclaim the tax).

    You may also benefit from posting some information on the Benefits board and make sure you are claiming all appropriate benefits and that you are protecting you state pension benefit.
    Last edited by cloud_dog; 02-03-2018 at 9:41 AM.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • ProDave
    • By ProDave 2nd Mar 18, 11:21 AM
    • 845 Posts
    • 961 Thanks
    ProDave
    Personally given the date, I would draw the 25% tax free immediately. Draw half the remainder now (before April 5th) and then draw the other half of the remainder after April 5th, thus splitting it over 2 tax years.

    Definitely sign on. You should at least get the basic jobseekers allowance, and more importantly NI credits to keep your state pension entitlement up to date.
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