What to do with unused pension pot before age 75

[Mr Badger]

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.

 

[Mr Badger]

Send it to me.

Well that kitten got drowned for nothing. Do not tempt the forum gods!

 

[Mr Badger]

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.

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.

 

[Mr Badger]

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?

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.