Surprise Pension @ 54 = what to do
Discussion
Chaps it seems a job I had in my twenties paid into 2 pensions that have "found me" once I send them proof of passport and utility.
One is £43k and one £26k I hit 55 next year and as its totally unexpected income I want to cash in as much as I can as soon as I can.
Do I need a FA or can you guys steer me ;o)
One is £43k and one £26k I hit 55 next year and as its totally unexpected income I want to cash in as much as I can as soon as I can.
Do I need a FA or can you guys steer me ;o)
What sort of pensions are they? If they're straight DC schemes then for ease of handling them in future I'd look into putting them both into a cheapo personal pension from a provider that is geared up to let you take an uncrystallised pension funds lump sum (i.e. take the whole lot in one go as you've been able to do since 2015). Most providers should be able to do this. Seeing as they're quite old arrangements, though, it's worth checking to see if they contain any sort of guarantees (annuity rates, investment returns etc), as these can be very valuable and should make you reappraise whether you want to cash them in. If you do cash them in be aware that if you do it in one go then you'll be clobbered for tax - it's taxed as income in the year you receive the payment. Depending on how much your other income is it may be worth cashing a bit this tax year, a bit the next.
But really you need to identify what sort of pensions they are first.
But really you need to identify what sort of pensions they are first.
DSLiverpool said:
Thanks Daimler, am I right in thinking I can take 25% tax free a year or just once and the other 75% is taxed regardless of income?
Once. The rest is added to your income and taxed as part of your income over your tax free allowance (currently £11.5k).Pay attention to the 3rd line in purplemoonlight's post above.
Oh. and the view from your office is the same as that from my kitchen window.
Jockman said:
Oh. and the view from your office is the same as that from my kitchen window.
Liverpool or Birkenhead office? I hope its not Birkenhead as all I can see is the tram shed and the CPL headquarters! New Liverpool office is 50 yards from the ferry so that will be an adventurous commute.Jockman said:
The one in your profile picture.
I watch the Anglican Cathedral rise from the mist most mornings from the Prenton ridge. Great Fireworks in Liverpool on NYE and I can't remember the last time I paid for Tranmere Rover fireworks in November !!!
It's my Scottish side......
Similar from one of our front bedrooms alas not the one I am in! Peter Price blocks out a lot of our view!I watch the Anglican Cathedral rise from the mist most mornings from the Prenton ridge. Great Fireworks in Liverpool on NYE and I can't remember the last time I paid for Tranmere Rover fireworks in November !!!
It's my Scottish side......
DSLiverpool said:
Jockman said:
The one in your profile picture.
I watch the Anglican Cathedral rise from the mist most mornings from the Prenton ridge. Great Fireworks in Liverpool on NYE and I can't remember the last time I paid for Tranmere Rover fireworks in November !!!
It's my Scottish side......
Similar from one of our front bedrooms alas not the one I am in! Peter Price blocks out a lot of our view!I watch the Anglican Cathedral rise from the mist most mornings from the Prenton ridge. Great Fireworks in Liverpool on NYE and I can't remember the last time I paid for Tranmere Rover fireworks in November !!!
It's my Scottish side......
I can fully empathise with the "take the money and run approach" but some advice probably wouldnt go amiss and as long as you avoid the sharks I suspect it will be cheaper than you think. There are some proper independent financial advisers who post on here, one of whom I have used and would happily recommend if you DM me (you sold me a phone for my office once I still use everyday so I owe you one!) but things to consider would include the inheritance tax advantages of a SIPP, how a DB pension is valued against the lifetime allowance etc. and I am sure a ton of other stuff I dont know. Quality problem to have though...
I discovered I had an old pension about ten years ago. They had chased me across the world, through three countries, five addresses, and finally they found me, sought proof of identity, and gave me the money. 
£1200
To this day I have no idea what it was for, as in my foolish youth I was wise about such things and elected to pay the absolute minimum into any sort of pension scheme thrust upon me. I knew I’d never get to pension age....
£1200
To this day I have no idea what it was for, as in my foolish youth I was wise about such things and elected to pay the absolute minimum into any sort of pension scheme thrust upon me. I knew I’d never get to pension age....
Just to update this, I did have 2 parallel Aegon pensions running but only one was visible, they had 40% tax-free allowance and I only found out when I got to 55 and called them, the IFA report somehow missed it.
Another surprise was in the report I had 2 small pensions (small pots) from 2 year stints at PLC`s, I cashed in the Zurich one for under £10k and went to do the same with the Honeywell one to find out it was a DB / final salary pension and was worth quite a bit north of £10k.
Long story short - look deep into your pensions and employment history as you could be sitting on a nice little lump.
Another surprise was in the report I had 2 small pensions (small pots) from 2 year stints at PLC`s, I cashed in the Zurich one for under £10k and went to do the same with the Honeywell one to find out it was a DB / final salary pension and was worth quite a bit north of £10k.
Long story short - look deep into your pensions and employment history as you could be sitting on a nice little lump.
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