What to do with unused pension pot before age 75

Mr Badger

Mr Badger

Mr Badger

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Someone I know is about a year away from reaching 75. When they were working for the NHS they had a defined benefit pension and took this when they retired at age 60. Apparently they also paid AVCs (I think this was invested via their bank) and built up a pot of cash than they have never touched.

I gather that certain rules kick in if you have not used a pension fund to buy an annuity or whatever by age 75. The person in question is not online and says that their local bank branch has closed and they can never get through to anyone on the phone, so they don't seem to be doing anything to get advice. Except mentioning it to me.

A quick search has thrown up loads of not very helpful stuff. Is there a definitive guide available somewhere that clearly explains the options available to someone in this situation? Aside from "send it to me" does anyone have any top tips for the smart thing to do with this fund? If it's of any relevance the person is a basic rate tax payer.
 
The pension provider should have already sent them the retirement options or at least details to start the retirement journey (i'm pretty sure it should have triggered around age 74). Is it really with the bank or did they just use an adviser at the bank to setup an AVC account with another provider outside of the NHS DB scheme?
 
They could go to their local citizen's advice and ask there initially.

Also, check their local library, sometimes they have services to provide advice on matters like this and housing etc.

You mention they're not online, they can get online at the library and at least access information that way (obvs probably best to avoid logging into online banking etc. there) then once they've got advice, read what they need to perhaps they could write to or phone the provider.

Obviously they've mentioned it's difficult to get through on the phone ergo get the advice beforehand and minimise the need for phone calls save for instructing the provider re: what they want to do. Then just phone up when they're in a position to, they're retired after all so they'll have to suck it up and prepare for some hold music for a bit.
 
dowie said:
They could go to their local citizen's advice and ask there initially.

Also, check their local library, sometimes they have services to provide advice on matters like this and housing etc.

You mention they're not online, they can get online at the library and at least access information that way (obvs probably best to avoid logging into online banking etc. there) then once they've got advice, read what they need to perhaps they could write to or phone the provider.

Obviously they've mentioned it's difficult to get through on the phone ergo get the advice beforehand and minimise the need for phone calls save for instructing the provider re: what they want to do. Then just phone up when they're in a position to, they're retired after all so they'll have to suck it up and prepare for some hold music for a bit.
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When I say they are not online, that means that they do not do computers or smartphones at all. I was hoping to find a clear breakdown of the options to explain to them. They have already said that they don't really want to buy an annuity, which is presumably the main point of making AVCs. My thinking is that they might have been better served sticking their extra contributions into an ISA rather than an AVC, but they didn't like the idea of investing in stocks and shares. Anyway, we are where we are.
 
macster said:
The pension provider should have already sent them the retirement options or at least details to start the retirement journey (i'm pretty sure it should have triggered around age 74). Is it really with the bank or did they just use an adviser at the bank to setup an AVC account with another provider outside of the NHS DB scheme?
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I'm not 100% sure, but the one time they showed me some correspondence about their AVC fund it was from HSBC, which is the bank they have always used. Unlike me - I've had more current accounts than you could shake a stick at.
 
If it was HSBC, then if its not still with them it may be with ReAssure as they bought some books of business from HSBC. I'd try HSBC first, but failing that it may be worth giving ReAssure a call to see if it is with them (0800 073 1777) or write to them - ReAssure, Windsor House, Telford, TF3 4NB.
 
Mr Badger said:
When I say they are not online, that means that they do not do computers or smartphones at all. I was hoping to find a clear breakdown of the options to explain to them. They have already said that they don't really want to buy an annuity, which is presumably the main point of making AVCs. My thinking is that they might have been better served sticking their extra contributions into an ISA rather than an AVC, but they didn't like the idea of investing in stocks and shares. Anyway, we are where we are.
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It sounds like they're just being difficult for the sake of it tbh; "nah I don't do computers", "annuity? don't wan it", "ISA, don't wan it"...

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There's only so much you can do for people like that, there are advice services out there, there are free computer facilities at libraries but if they choose to put themselves into a sub-optimal situation because they're so stubborn then that's on them.
 
Gotta agree with the above a bit. Unless it's a close relative that you're happy to invest the time in, then it being someone you just "know" you need to decide how much effort you're planning to put into this as it sounds like they've little interest in sorting it out.

Failing that they pay for a financial advisor to sort out whatever it is they wish to do.
 
most pension plans have a default option, which is likely to be an annuity... unless the AVCs and the pension fund are linked then they won't know about it so the person will likely get the worst annuity in terms of cost and benefits.

TBH, I wouldn't be that bothered about it if they ain't...
 
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