Withdrawing Pensions Early

Martynt74

Martynt74

Martynt74

Soldato
Joined
20 Feb 2004
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Hondon de las Nieves, Spain
Hi Guys

My girlfriend has quite a lot of small pensions set up by various companies she worked for. However due to moving around a bit none of the individual accounts have very much in them (around £400 - £700) each.

We’ve tried to transfer these into her current pension plan however we’ve been advised that they are unwilling to transfer any policies which are under £1000.

Her dad is an accountant and had said he thought he had heard that some pension companies are willing to come to an agreement and pay out an early settlement in instances like this. Has anyone heard anything similar?
 
You can get your pension money whenever you want IF IT'S A PRIVATE PENSION - you just don't get any of the tax breaks.

If you take out enough to push you into the 40% tax bracket for that year (or are already in 40%) - you'll lose 40% of what you would have got if you'd taken it out upon retirement. Which is quite a lot to chuck up the wall ...


And thats before the pension fund put on their exorbitant 'early withdrawel' fees ..
 
britboy4321 said:
You can get your pension money whenever you want - you just don't get any of the tax breaks.
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Wrong - it depends on the scheme. Some have a time limit which once reached stipulates you may not withdraw, only transfer into another pension scheme.

Did you not learn after your last attempt to give 'advice' in that tax thread that its better to keep quiet if you don't know?

Edit: Going back and editing your post doesn't change the fact you keep posting wrong things.
 
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britboy4321 said:
You can get your pension money whenever you want IF IT'S A PRIVATE PENSION - you just don't get any of the tax breaks.

If you take out enough to push you into the 40% tax bracket for that year (or are already in 40%) - you'll lose 40% of what you would have got if you'd taken it out upon retirement. Which is quite a lot to chuck up the wall ...


And thats before the pension fund put on their exorbitant 'early withdrawel' fees ..
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NO NO NO.

It depends on the scheme - most schemes will NOT let you withdraw early, penalties or not.
 
i have the same problem. i saved up 3000 quid with aviva. and now ive moved job, life has changed etc. im no longer paying into this stupid thing. and they wont let me touch the money til ive retired. :(
 
-Tauren- said:
i have the same problem. i saved up 3000 quid with aviva. and now ive moved job, life has changed etc. im no longer paying into this stupid thing. and they wont let me touch the money til ive retired. :(
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Firstly, I don't know what your circumstances are, but you should be paying into a pension.

If you do have a current pension, its often best to consolidate these into one pension (maybe even keep a SIPP if you plan on moving jobs often) to avoid higher fees when you stop contributing.
 
You should really speak to a qualified tax/pensions adviser for this kind of thing. I don't think those chipping in their $0.02 really grasp how incredibly complex the pensions system is and with all the changes coming to force you really do need the guidance of somebody who is professionally qualified to advise you.

There are so many factors to consider not only about the pensions schemes you wish to make an early drawdown from, but also of your girlfriend's financial situation etc. I'm guessing tax avoidance will be her primary concern. I work part-time for a firm of IFAs specialising in tax and pensions and the mess that they see people getting into trying to manage their own SIPPs is just madness.
 
Theophany said:
You should really speak to a qualified tax/pensions adviser for this kind of thing. I don't think those chipping in their $0.02 really grasp how incredibly complex the pensions system is and with all the changes coming to force you really do need the guidance of somebody who is professionally qualified to advise you.

There are so many factors to consider not only about the pensions schemes you wish to make an early drawdown from, but also of your girlfriend's financial situation etc. I'm guessing tax avoidance will be her primary concern. I work part-time for a firm of IFAs specialising in tax and pensions and the mess that they see people getting into trying to manage their own SIPPs is just madness.
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If you speak to an IFA lots will say 'I'll give you advice all for free'.

Be careful - if they sign you up - they'll take a percentage of your contributions FOREVER.

My IFA said 'I'll do it for free' then upon asking 'Yup - 3% of your contributions straight into my back pocket'.

Instead I asked to be charged flat fee - which was £1000. He agreed (otherwise I'd have walked). I did the maths, and this saved me thousands and thousands of pounds in the long term .. an extra 3% reaching my fund ..
 
Theophany said:
You should really speak to a qualified tax/pensions adviser for this kind of thing. I don't think those chipping in their $0.02 really grasp how incredibly complex the pensions system is and with all the changes coming to force you really do need the guidance of somebody who is professionally qualified to advise you.

There are so many factors to consider not only about the pensions schemes you wish to make an early drawdown from, but also of your girlfriend's financial situation etc. I'm guessing tax avoidance will be her primary concern. I work part-time for a firm of IFAs specialising in tax and pensions and the mess that they see people getting into trying to manage their own SIPPs is just madness.
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I am not an adviser, but I do work for a large FS company who specialise in SIPPs so I have a fair amount of knowledge on the matter.

The majority of pensions on the market today will let you transfer them out (for a fee) but will not let you withdraw them early. The triviality rule applies for small funds, and in certain circumstances, but no in the case of the OP.
 
jamief said:
I am not an adviser, but I do work for a large FS company who specialise in SIPPs so I have a fair amount of knowledge on the matter.

The majority of pensions on the market today will let you transfer them out (for a fee) but will not let you withdraw them early. The triviality rule applies for small funds, and in certain circumstances, but no in the case of the OP.
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Fair. I've got a layman's knowledge purely from reading through pension trust settlements, policy illustrations and client pensions but I don't have the working knowledge of somebody qualified to advise as I haven't sat any of the required examinations.

I'd say without the full facts, it would be difficult to provide very accurate information. Admittedly, given that the amounts being dealt with are rather small it might be an idea to first check with an adviser in the OP's bank branch first before going direct to an IFA.

Also, 3% trail commission is bloody insane. IFAs I work for are charging between 0.5-1% trail commission and making a good living from doing so. Total portfolios under management is something in the area of £100-150m between both of them now.

Out of interest who are you with? Anybody I would have heard of?
 
Theophany said:
Fair. I've got a layman's knowledge purely from reading through pension trust settlements, policy illustrations and client pensions but I don't have the working knowledge of somebody qualified to advise as I haven't sat any of the required examinations.

I'd say without the full facts, it would be difficult to provide very accurate information. Admittedly, given that the amounts being dealt with are rather small it might be an idea to first check with an adviser in the OP's bank branch first before going direct to an IFA.

Also, 3% trail commission is bloody insane. IFAs I work for are charging between 0.5-1% trail commission and making a good living from doing so. Total portfolios under management is something in the area of £100-150m between both of them now.

Out of interest who are you with? Anybody I would have heard of?
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My IFA stated that the average was 2.4%. If it makes any difference, I went for one that was not 'bound' to any particular company, rather could consider the whole market. This was about 5 years ago.
 
I'm talking about the rest of your contributions to this thread, where you at first didn't even realise there was a time limit on withdrawing cash contributions from pretty much any pension scheme. Pretty fundamental.
 
[TW]Fox;18619683 said:
I'm talking about the rest of your contributions to this thread, where you at first didn't even realise there was a time limit on withdrawing cash contributions from pretty much any pension scheme. Pretty fundamental.
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Aaaah - so when you said 'no-one believes you Britboy' you meant

'Everyone believes you about the most recent thing you posted, however one of your earlier things no-one does - even though it in some circumstances is actually entirely true'

??

Wow. I think when I read that back to myself it's actually a compliment. Thanks :)
 
[TW]Fox;18619683 said:
I'm talking about the rest of your contributions to this thread, where you at first didn't even realise there was a time limit on withdrawing cash contributions from pretty much any pension scheme. Pretty fundamental.
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You talk of contributions, all you've done so far is annoy someone. Besides someone is coming onto the internet for advice, I'm sure there are much more secure and reliable sources to get information on these matters than here. And if someone asks in a computer hardware forum about pensions then what do you expect, it's unlikely to be accurate.
 
Mason- said:
You talk of contributions, all you've done so far is annoy someone. Besides someone is coming onto the internet for advice, I'm sure there are much more secure and reliable sources to get information on these matters than here. And if someone asks in a computer hardware forum about pensions then what do you expect, it's unlikely to be accurate.
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Other than britboy I think the information is pretty much correct! 2.4% Trail Commission sounds rather unlikely to me, but I'll check and see what our average is at work. We have IFAs from all over so it shouldn't be too hard to work out the average between them.
 
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