Setting Son

Pensions

39 posts in this topic

I have a main pension and also a little one from a job earlier in life. The little one is only worth a couple of grand so I called the pension company to see what could be done with it. You can keep it as is or transfer it, they inform me. Out of interest, can I cash it? I enquired (not intending to anyway). No, not until you're 55.

My interest piqued, I dug into to this a bit deeper, and they are correct. You now cannot get access to your pension funds until you are at least 55. Digging deeper it appears that even if you are in real trouble financially, including bankruptcy, you cannot access any of 'your' fund, even that which you have contributed yourself. Strangely, your creditors can claim against your pension, however. So, you can't use your pension fund to save yourself but it's acceptable for your creditors to grab it.

I haven't really thought about this kind of stuff for ages so it may be old news. What is this legislation aimed at? Making sure you provide for your retirement or ensuring that everyone doesn't withdraw their money from now distrusted banks etc.

Food for thought, maybe.....

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I have the worst set of pensions going with 10-14 years in a number of pots all over the place . I have asked before if it would make sense to just create one single fund and then carry on from their and the advice is always no that the losses on the transfers make it not viable.

As regards getting at your pension money the Government (both current and past) are trying to do whatever they can to ensure that no one outside of those who are already very rich can afford to retire much before currently their 67th birthday. They want you everyone to work as long as possible so as to ensure that you are contributing to the pot and not just taking from . Of course MP's are exempt from this because their pensions have there own rules.

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I have the worst set of pensions going with 10-14 years in a number of pots all over the place . I have asked before if it would make sense to just create one single fund and then carry on from their and the advice is always no that the losses on the transfers make it not viable.

As regards getting at your pension money the Government (both current and past) are trying to do whatever they can to ensure that no one outside of those who are already very rich can afford to retire much before currently their 67th birthday. They want you everyone to work as long as possible so as to ensure that you are contributing to the pot and not just taking from . Of course MP's are exempt from this because their pensions have there own rules.

There isn't always a hit to be taken on transfer value but presumably you've had it confirmed by your fund holders that in your case there will be? Of all the penion transfers I've done only bleedin' Equitable Life have applied a transfer penalty, others have transferred at face value.

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I understand that not being able to access funds until age 55 is a fairly recent change, the age being 50 until a year or so (?) ago. Rules to stop individuals cashing-in pensions have been evolving for quite a few years. I remember being able to cash-in my pension contributions after leaving my first job in the mid-70s - just a few hundred quid - but even then the rules were in the process of changing which would lead to such contributions being frozen, although subsequent legislation would allow them to be transfered to another scheme. If I remember, the (stated) notion behind this was to build a bigger pensions base across the national workforce and allow pension funds to plan their strategies longer term and with greater confidence in the level of funds they would hold.

Much of the problem now is that the whole pensions business has been discredited as a result of political manipulation.

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I understand that not being able to access funds until age 55 is a fairly recent change, the age being 50 until a year or so (?) ago. Rules to stop individuals cashing-in pensions have been evolving for quite a few years. I remember being able to cash-in my pension contributions after leaving my first job in the mid-70s - just a few hundred quid - but even then the rules were in the process of changing which would lead to such contributions being frozen, although subsequent legislation would allow them to be transfered to another scheme. If I remember, the (stated) notion behind this was to build a bigger pensions base across the national workforce and allow pension funds to plan their strategies longer term and with greater confidence in the level of funds they would hold.

Much of the problem now is that the whole pensions business has been discredited as a result of political manipulation.

Yes 2010, my wife was 50 then and had a two week opportunity between her birthday in March and the end of that tax year during which she could have taken her pension. She didn't and now can't do so until she's 55 at least.

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There isn't always a hit to be taken on transfer value but presumably you've had it confirmed by your fund holders that in your case there will be? Of all the penion transfers I've done only bleedin' Equitable Life have applied a transfer penalty, others have transferred at face value.

A decent financial adviser can in most cases get the transfer fees paid for by the company you are transferring to.

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You should be able to transfer smaller pots into a SIPP if they're DC (unit-linked-type) savings. A financial adviser might be sensible. If they're DB (final salary type) benefits, keeping them as they are is probably sensible, and I presume that is the advice you've already received. Taking DB pension early is not usually sensible unless you have serious health issues. Make sure all your pension providers have your current address as well.

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