Taking out everything from your Pension Fund(s)

[Simpo Two]

ellroy said:

I suspect the reason for some firms not allowing full withdrawal may be as simple as their computer systems not being up to the job.

Or they can't get their hands on that much cash - do they have that much (unexpected) liquidity? And think of all the future fees and charges they'd lose.

[ellroy]

Sale of liquid assets t+3 settlement through to t+10 for collectives, they can easily access the cash.

[Simpo Two]

ellroy said:

Sale of liquid assets t+3 settlement through to t+10 for collectives, they can easily access the cash.

You'll need to explain t+x, but still, if lots of people liquidated it wouldn't do the markets much good would it?

[sidicks]

ellroy said:

Sale of liquid assets t+3 settlement through to t+10 for collectives, they can easily access the cash.

It will very much depend on what the policyholder has chosen to invest in - Gilts = t+1, credit = t+2/3, private equity = ??, property = up to 6 months!

[Roger Irrelevant]

Ginge R said:

Maybe of course, that's where this is all heading, maybe the entire proposition is being reframed so that justification for ending tax relief on retirement income will be as seductive and logical as booking the flight to Thailand ("See, told you. We gave you all your money and look what you did with it.. blimey, you only went and spent it didn't you?").

I've been saying this since the day the reforms were announced. The basic deal with pensions has always been that you get tax relief on the money you put in, but to get it you're restricted to doing something reasonably sensible with your money come retirement. Now that the last bit's no longer true it seems really easy for a future government to justify ending, or at least drastically reducing, tax relief. And they'd probably love to do this as pensions tax relief costs a hell of a lot.

Of course, there's no reason why people who are already retired or coming up to it would give a toss about this as they've had it both ways - generous tax relief and now freedom to do what they want with their cash. It'll be the younger generations that get shafted by this as saving a decent stash for retirement becomes more difficult still buy hey, they tend not to vote as much so who cares?

I've just realised how marinaded in cynicism this post is. Bet I'm not wrong though.

[Simpo Two]

Aha, 't' must be days. I get there eventually

When a Govt starts twiddling with legislation you have to ask whether they have the population's best interests at heart - or their own. I'll leave you to decide.

[Claudia Skies]

Roger Irrelevant said:

I've been saying this since the day the reforms were announced. The basic deal with pensions has always been that you get tax relief on the money you put in, but to get it you're restricted to doing something reasonably sensible with your money come retirement.

Well sort of. You gat tax relief going in but (apart from the tax free lump sum) you end up being taxed on what you take out.

An ISA works exactly the opposite way round. No tax relief going in but what comes out is tax free. There is no doubt that many prudent people have been using ISAs as part of or instead of their pension arrangements. As such, it makes some sense to relax the restrictions on drawing pensions.

Gordon Brown did, of course, screw both of them by stealing back the dividend tax credit. So effectively investment income within a pension or ISA is taxed at 10% all the way through.

The risk is, as Sidicks mentioned earlier in this thread, that financial charlatans will persuade idiots to transfer benefits out of their cosy public-sector pension schemes, convert to a private defined contribution (money purchase) pension scheme and then pull out shed-loads of cash!

[Skyedriver]

Apologies but not sure what you mean by DB & DC Schemes.
I have a number of old pension schemes from past employment,
IIRC
26k
17k
7k
If I were to transfer the 26k one to another provider I would get 22k due to Market Adjustments but the annual pension it would provide as an annuity is around £900. About 4% P/A
I'd rather take everything out (in stages) and put it into an ISA as I reckon I could get a better deal in equities and if I draw some of the capital in my late 60's/70's it wouldn't matter too much as when I get older (80's) I wouldn't need as much money (due to stopping driving less active etc. I have already received some documentation a while ago suggesting they wouldn't allow a full cash withdrawl however.

[Mattt]

Defined Benefit Eg final salary or defined contribution

[beeej]

re: some providers won't be ready by April, you might want to listen to the latest Moneybox (scroll to 17mins 30s)

http://www.bbc.co.uk/programmes/b050rz2w