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1. Jase - Member

   Partner has a deferred pension from a previous employer that is going to be worth about £60 a week.

   As she doesn’t have a current pension to transfer this into we are looking at any other options available – one of which is to cash it in and invest the money – perhaps as a deposit for a property to rent out.

   Can you generally cash them in? We’ve recently had a letter advising of the transfer value – is this the amount we would likely get or will it be much lower?

   I know very little about pensions so any help appreciated.

   Posted 7 months ago #
2. anjs - Member

   No, the HMRC will not allow it.

   Posted 7 months ago #
3. gusamc - Member

   1 - take professional advice (pref from at least 2/3 sources, so you get a consistency check) and sorry to be a cynic but people make money in pensions from commission, so will generally advice a transfer - on which they get commission.

   Fundamental question, what sort of pension is it
   - money purchase (where you contribute money to the pension, generally via the stock market) and the pension value is expressed as a cash sum
   - final salary scheme (ie defined benefits where you KNOW the value of the pension) in amount you'll get at a date

   Posted 7 months ago #
4. thisisnotaspoon - Member

   IIRC, yes, but you have to pay income tax on it (as it was pre tax to start with).

   Posted 7 months ago #
5. Jase - Member

   It was a final salary scheme IIRC

   Posted 7 months ago #
6. frogstomp - Member

   Seek professional advice.. you may be able to transfer it into a SIPP which can include property...

   Posted 7 months ago #
7. thisisnotaspoon - Member

   Duuno about Defined beinifit/final sallary pensions, I'd have thought there was no money in the pot to pay it, just a promise?

   With defined contribution pensions you can take the money out to self invest, but you'd need a good accountant to look after it, and IIRC the list of alowable investments is quite limiting (definately not residential property).

   Posted 7 months ago #
8. mastiles_fanylion - Member

   Seek professional advice.. you may be able to transfer it into a SIPP which can include property...

   
   Tell me about this please - with my pension taken into account I could pay off my mortgage if I can put it into my property. Or have I got the wrong end of the stick?

   Posted 7 months ago #
9. Pembo - Member

   If the final salary is index linked then why not keep it. £60 doesn't buy you a lot but will help with the weekly food bill when you retire.

   Posted 7 months ago #
10. gusamc - Member

    Personally I would NEVER NEVER NEVER, NEVER (repeated) transfer out of a final salary scheme (*becuase you have a defined known benefit at a given date [plus likely inflation linked benefits], if you transfer out of it you will have a pot of money invested in the stock market and I hope you're aware of what's happened to pesnions there [*down by 15-30% over last few years] - ie you don't know what you will get when you want/have to take it - much lesser deal IMHO)

    I would look at the scheme options, are there scheme trustees you can speak to, any legitimate bodies - Union reps etc that you can deal with.

    Posted 7 months ago #
11. teef - Member

    Transfer it into a low cost SIPP and manage it yourself - you can't do any worse than the so called professionals.

    Posted 7 months ago #
12. Jase - Member

    They seem to be keen for it to transferred elsewhere as are currently offering an enhanced transfer out value.

    Posted 7 months ago #
13. Pembo - Member

    Teef - poor advice.

    Index linked final salary scheme is much, much better than a low cost SIPP.

    Posted 7 months ago #
14. Pembo - Member

    They seem to be keen for it to transferred elsewhere as are currently offering an enhanced transfer out value.

    And they are doing this because they are really nice people, yes?

    My mum has just received an increased pension offer on her final salary pension if she foregoes any further RPI increase. She is 80 in March and if she lives beyond 83 she will then be out of pocket.

    Most companies are trying it on in some way or other so be careful if you get any type of offer to change your pension provision - it usually means you will be out of pocket.

    Posted 7 months ago #
15. hels - Member

    No, you can't take it as cash. Unless she had less than two years service and even then you can only take the part that was her contributions, not the employers.

    If it was a final salary/defined benefit scheme you would be crazy to transfer it anywhere else. It is safe where it is and there is no benefit to moving it, unless you think the share market is a really really safe place for your money in which case go for it !

    The FSA did a huge review of these type of transfers in the late 90s and pension providers paid out millions to those "missold" personal pensions.

    Posted 7 months ago #
16. Jase - Member

    From the responses it doesn’t seem like a simple case of calling them and waiting for the cheque to arrive.

    Was planning to leave it alone unless we could do something significantly better which it doesn’t sound like we will be able to. As Pembo mentioned the amount will be useful come retirement.

    Posted 7 months ago #
17. gusamc - Member

    Jase, they're doing the same to me. It's becaue they want to reduce their liabilities. I would NOT cash in. (*unless you are sure that you will get more money via the cash in route, the hard facts are that this will require you to accurately predict future stock market performance/interest rates/inflation etc and when your Mrs will die, sorry but it is that harsh)

    Consider their position, - now they have to pay your Mrs 60 a week [presumably with index linking] till she dies [*IMPORTANT are there benefits for dependents etc as that needs to be costed in], ie they actually have unlimited liability [*ok it's not totally unlimited, as death is inevitable but say we get 10 years of 10% inflation and she lives to 105 which is possible]

    By giving you a one off they convert to a fixed liability - £X, however your wife ONLY gets a better deal depending on, how long she lives, stock market performance etc etc.

    In old age people want/need security, I'm not fully aware of the monies etc but IMHO a final salary pension if worth hanging onto, even if that amout it only helps you spread the risk.

    Posted 7 months ago #
18. monkey_boy - Member

    no you cant, i had a one frozen when i worked in ireland, had to transfer it to the uk, i asked about cashing it in and they said its impossible.

    Posted 7 months ago #
19. organic355 - Member

    Bit of a hijack here sorry.

    I am in a bit of a mess with my pensions aswell as I have been through a few jobs both in Uk and US.

    Ive got my own private pension (scottish widows) which is fairly crap but set it up when a company i was working for didnt have there own scheme, but I also have a company pension from when I worked in London, a US pension (401K) from when i worked in the states and a university pension from a brief spell working at UNI.

    I want to try and get all these funds together into one place, but not sure if all the fees/commission will be worth it.

    The London pension isnt worth much as I was on a crap salary, but the US one (Fedility 401K) is currently at around £20,000.

    Anyone know what my options are for geting this money now? and can i just take a cask payout?

    cheers

    Posted 7 months ago #
20. hels - Member

    Out of curiosity, why do they need to be together in one place ? I know if means changing your address in a few more places when you move, but to re-iterate, never ever transfer out final salary benefits. (I don't know how pensions work in USA but it is likely similar) you can almost never take them as cash, otherwise frankly what would be the point of a pension scheme ??

    If the spell at the Uni is less than two years, you may find you don't have a pension there btw.

    First step is to write to all the companies and make sure they have all your correct details and asking for a statement. Then take that to see a reputable financial advisor (and by reputable I mean not on commission)

    Posted 7 months ago #
21. Pembo - Member

    I'm not qualified in any way to give advice but here goes:

    401k - no idea, you need to get specialist advice.

    If the Uni pension is final salary/defined benefits then stick with it.

    Scottish Widows plan is probably performing poorly and charging high fees so a SIPP may be a better option. But some personal plans have guaranteed minimum returns like the 4% guarantee I have with Pearl, so again get some advice.

    Posted 7 months ago #
22. chakaping - Member

    I would keep it in the final salary scheme too.

    A guaranteed £60 a week (assuming it will keep pace with inflation) might be very welcome and pay a large part of your living costs once retired.

    Posted 7 months ago #
23. Jase - Member

    Yes, I believe it is inflation linked as has increased from £2,400 pa to £3,200 in the past few years.

    Posted 7 months ago #

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