Protected Tax Free Cash in old pension

[deggles]

Hoping some pension experts can shed some light for me...

I have an old pension scheme from my last full time employment which I left in 2007. The original company scheme was wound up a few years ago and got transferred into a 'Section 32' plan which I'd pretty much forgotten about.

Doing some financial house-keeping I thought I'd transfer this into my SIPP so everything's in one place, however it transpires this old pension has 'Protected Tax Free Cash' which would be lost on transfer.

The numbers are fairly small potatoes in the grand scheme of things:

Current transfer value is around £8.8k
At 5th April 2006:
Value of fund ~£2500
Tax free cash amount ~£1330

Does this mean the same proportion (>50%) of whatever the pot is worth becomes available as tax free lump sum and is therefore worth leaving where it is rather than transferring?

I'm currently 40 so a few years off retirement, if that makes any difference.

Thanks in advance

[deggles]

bump

Anyone?

[PJ RS]

Protected cash in pensions is horrendously complicated and, as I think you have 'scheme-specific' protection, the answer in terms of how much % of fund you could take as tax free cash at retirement isn't as simple as it being the same proportion as it was in 2006.

I could try and explain how it works but it would take me all day and there is a good chance I'd get it wrong.

This link tries to explain it but unless you're a pensions geek it probably isn't going to make much sense:

https://www.pruadviser.co.uk/knowledge-literature/...

Given the size of the fund and the number of years you are away from retirement, whilst ideally you would like to keep the protection, it wouldn't be my number one priority if I thought the fund could do better elsewhere.

Hope this helps.

[deggles]

Many thanks for the reply, yes it does seem the issue is heinously complicated and all the guidance I can find is explicitly aimed at advisors rather than laymen.

It does indeed appear to be 'scheme specific protection':
"Scheme specific TFC protection enabled the pre-A-day value to be protected"

Which sounds like just the absolute value is protected, but I will be speaking to an advisor soon so will seek clarification.

I'm not hugely impressed by the fund performance or the management charge (which could easily wipe out any TFC advantage over a few years), so leaning towards transferring to my low-cost/passive SIPP portfolio; again will seek advice before committing.

Thanks again

[Simpo Two]

deggles said:

...I will be speaking to an advisor soon so will seek clarification.

I'm not hugely impressed by the fund performance or the management charge (which could easily wipe out any TFC advantage over a few years), so leaning towards transferring to my low-cost/passive SIPP portfolio; again will seek advice before committing.

My advice, but I'm not an Adviser, is to contact Nik or Julian at IM (see sticky). As none of us are Advisers you have not been charged for this call

[Tiggsy]

Protected tax free cash is not that complex although the gamble of giving it up buy transferring (and dropping to the standard 25%) may need some thought (though the numbers are not huge either way). Any decent adviser will explain it very quickly and easily.