Just remembered i have a couple of small pensions.........

[dickymint]

and can't get my head around the new rules. Both the same pension fund but one is when I opted out of SERPS. SERPS one has a value of £23k the other £27k.

I'm 55 and unemployed (out of choice and claim no benefits)! No other provision for a pension at 65 apart from the 30 years of NI contributions for Basic State Pension.

So I want to fund a new house extension and not a Lambo Anybody know how much of this £50k i can release immediately?

And yes I will be talking to the Trustees etc soon.

[Ginge R]

Dicky,

You can take 25% of any funds as tax free cash from aged 55.

[Ginge R]

.. and oF course, you have choices about how you draw the balance - drawdown, annuity (snort) etc.

[condor]

Think you'll find they've raised it to 35 years NI contributions for basic state pension. Plus I doubt if you'll get it at 65, as a 54 year old female now has to wait till 66 before she can draw the state pension.

[dickymint]

Thanks guys. Just had a brief chat with L and G i'm told that because my pot is below £50k (it's £48k now) my only option now is to take 25% cash and be locked into an annuity! Drawdown is not an option because pot not over £50k!

I didn't think to ask if i could top up by a couple of grand then take drawdown straight away. Any thoughts?

[Ginge R]

NO NO NO. This is why the annuity market, rightly, has been spit roasted over hot coals. The Budget gives you far wider capacity to invest or draw your money as you see fit and you don't have to select them anyway. Ask the call centre operator about the Open Market Option that you are entitled to have access to. This sort of crap from insurance houses really p*sses me off.

[dickymint]

Ginge R said:

NO NO NO. This is why the annuity market, rightly, has been spit roasted over hot coals. The Budget gives you far wider capacity to invest or draw your money as you see fit and you don't have to select them anyway. Ask the call centre operator about the Open Market Option that you are entitled to have access to. This sort of crap from insurance houses really p*sses me off.

It's boiling my piss too! All I would like to know from them, as I accept the full amount cannot be released in cash until next year, is if/how can i release money now without buying a poxy annuity.

[Ginge R]

I would be surprised if L+G specified that you had to have over £50,000 to go into drawdown. Notwithstanding that, if you didn' need anything other than a smallish amount of tax free cash from the pension, you can part crystalise your fund. The max tax free cash that you can take is 25% so if you want anything under £12,000 or so, ask for just that amount to be crystalised. Always take regulated advice that you trust though, if you're unsure of the implications and consequences (cop out/CYA caveat!) of what you're doing.

[rotarymazda]

25% now and the rest of it in 2015 under the new rules.

[dickymint]

Thanks again guys Thinking about it, the guy at the call centre may well be right and was quoting "chapter and verse" as i've just realised the initial changes come into force Today? Looks like i need to do a bit more digging.

[dickymint]

Ginge R said:

I would be surprised if L+G specified that you had to have over £50,000 to go into drawdown. Notwithstanding that, if you didn' need anything other than a smallish amount of tax free cash from the pension, you can part crystalise your fund. The max tax free cash that you can take is 25% so if you want anything under £12,000 or so, ask for just that amount to be crystalised. Always take regulated advice that you trust though, if you're unsure of the implications and consequences (cop out/CYA caveat!) of what you're doing.

Seems That there is a £50k minimum for drawdown - just found the "Members Guide" and it does state this on page 5

http://www.legalandgeneral.com/library/pensions/mi...

So I guess the question now is can L and G still enforce this as of today and prior to 2015?

If not I suppose I could always switch to a policy that does allow drawdown or maybe top it up to £50k.

[Ginge R]

Scheme rules still apply although I imagine there will be lots of scratched heads at pension companies across the country right now - drawdown comes at a cost to companies and it might be that they regard the minimum justifiable cost for the fuctinality as a fund size of £50,000 - in your interests. Similarly, I wouldn't suggest going into a SIPP at outset unless the client had even more than that or an otherwise compelling reason to do so.

It might be that you have to transfer to a pension which allows you that functionality. Cheap is not always best - 'reduction in yield' will always get you a pension which tops the list of research, but sometimes, it's worth it to tick a few boxes on the spec list in order to get the pension tht's right for you, and maybe have a slightly smaller pot. I hardly use L+G but it might be that your pension performance has more than justified the mild (?) inconvenience that you're experiencing now.

Putting in an extra £2000 gross may well be the easiest option - if you're doing it yourself though, or if the pension was set up by an adviser who is no longer active (assumingly) or proactive, make sure that he/she is off the record as the servicing agent first so that they don't (presumably) unfairly receive a chunk of your contribution.

[Ozzie Osmond]

OP - talk to Hargreaves Lansdown. They will almost certainly be able to sort you out. Very user-friendly.

[Ginge R]

dickymint said:

It's boiling my piss too! All I would like to know from them, as I accept the full amount cannot be released in cash until next year, is if/how can i release money now without buying a poxy annuity.

Dicky,

This might help - good news, possibly? More detail about the budget trickles out - although the guidance was around before. The Treasury has today waived a rule that compelled the saver to buy an annuity within six months of taking out a tax-free cash lump sum. Mention this to L+G. Be patient with the call centre type person tho'..

<<The government will also confirm today that people who have recently taken a tax-free lump sum from their defined contribution pension will be given more time to decide what they wish to do with the rest of their retirement savings and will not be put at a disadvantage should they wish to wait to access their pension savings more flexibly.>>

Edit: https://www.gov.uk/government/news/pensions-freedo...

Edited by Ginge R on Thursday 27th March 21:05

[Jockman]

Ginge R said:

Dicky,

This might help - good news, possibly? More detail about the budget trickles out - although the guidance was around before. The Treasury has today waived a rule that compelled the saver to buy an annuity within six months of taking out a tax-free cash lump sum. Mention this to L+G. Be patient with the call centre type person tho'..

<<The government will also confirm today that people who have recently taken a tax-free lump sum from their defined contribution pension will be given more time to decide what they wish to do with the rest of their retirement savings and will not be put at a disadvantage should they wish to wait to access their pension savings more flexibly.>>

Edit: https://www.gov.uk/government/news/pensions-freedo...

Edited by Ginge R on Thursday 27th March 21:05

Ohhh...that is interesting, Ginge

On Money Box Radio 4 yesterday I'm sure they thought once you'd taken the TFLS you were basically fooked.

Be interesting to see what unravels over the next 12 months

[dickymint]

Update: KERCHHINGGGGGGGG

Both pots now valued at over £50000 spoke to the "withdrawal" dept and forms arrived yesterday.

25% tax free with nil income option - balance remains in pot allowing the new rules to come into play in April.

Been watching the value on a daily basis which has been a roller coaster (dropped down to 48k a few months ago!). It's like watching a football match and hovering over the Cash Out button on my Paddy Power account

Cheers all

[Ozzie Osmond]

Remember

A. You can only win the cash jackpot once.
B. Might it be worth hanging on until April 2015 to find out exactly what the new rules will say? Very close now.

[jdearden]

I would double check what they will let you do as some plans you must have over 50k once 25% tfc is taken. Not all providers do this and can't for the life of me remember if lg are one of them but I can check tomorro when back in office.
If you need any help Nd would like some advice feel free to contact me. As although lv may let you go into drawdown contract hey may not be he best company to hve your money with going forward. The fact it's hardly grown in the past year is pretty disappointing when other well managed funds are still doing really well without masses of risk.
A lot of older pensions are stuck in funds and never changed. What was good 10 years ago isn't nexcesaeily good now. Plus annual management charges can be fairly high compared to newer funds and with a pot of 50k you can qualify for some great Amc discounts.

[Simpo Two]

Ozzie Osmond said:

Remember

A. You can only win the cash jackpot once.
B. Might it be worth hanging on until April 2015 to find out exactly what the new rules will say? Very close now.

And it happens to be General Election time too... anything could happen. The prudent will want it to be harder for people to access their pension funds, so the State has less burden in the future. The vote-buyers will want people to get cash from their pension early so they can buy TVs, feel happy and help keep the staggering recovery going. Short or long term? - we'll see.