Cashing in Pensions...yes that old chestnut

Flinkman

Flinkman

Flinkman

Associate
Joined
1 Oct 2011
Posts
102
Hi,
I currently have two redundant pensions sitting doing nothing. Over the years moving between jobs, each new company has a pension with a different company that I have signed up with.

So I now have two pensions doing nothing, there's a few thousand in each pension, and it annoys me that they are doing nothing. Is there any way to get the money out?

Any options available to me?
 
You an get that money out but you will then pay income tax on that as well as be subject to any other early withdrawal penalties (forget what it is in the UK but in the US it is 10%).


Easiest option is to collapse both all dormant pensions into a single pension which you contribute to and control. However, having diversifed investments is no bad thing I have a UK, Swiss and US pension which I worry about managing, at the same time this buys me lots of security.
 
You can transfer your redundant ones to your current pension. I did that just recently. Simple job and it took about two weeks.

Just make your you get good advice.
 
If you are over 60 and combined pot is less than 18000 you can take the lot out 25% is tax free the rest subject to income tax.

Assuming these are money purchase schemes (not Final Salary). If they are in the default fund (probably managed fund) Then they are invested and will just tick over in the background for you. You can move them but whether you should depedneds on costs and other factors.

Like others have said its nice to have them all in one place so they are easy to keep track of and may even benefit from a discount.
 
I'd just transfer it to your current pension, that's what I've done in the past.
 
D.P. said:
You an get that money out but you will then pay income tax on that as well as be subject to any other early withdrawal penalties (forget what it is in the UK but in the US it is 10%).
Click to expand...

If under age 55, you have to pay 55% tax to cash out your pension.

If you are over 60 and combined pot is less than 18000 you can take the lot out 25% is tax free the rest subject to income tax.
Click to expand...

To clarify, this is if all your pension funds total less than £18,000 not just the ones you want to access (not including state pensions).

If you are still some way off retirement i.e. under 55, as others have suggested it might be more convenient for you to transfer your other pensions to your current one. This of course depends on a few factors such as pension type (generally don't transfer from final salary to money purchase) and any fees charged to carry out the transfer (such as a percentage of fund value) etc.
 
Bung it into your current pension, who knows, you might be able to retire a few years early.

EDIT: Actually, cash it in and blow it all on a weekend in vegas.
 
Last edited:
You must log in or register to reply here.
Back
Top Bottom