Pensions advice, please.
- Thread starter User
- Start date
Page may contain affiliate links. Please see terms for details.
swee'pea99
Legendary Member
I'm a tad baffled by your "Not because I need the cash today but it makes sense to me to do so". Whether or not you can cash in early, it would seem to me that unless you really need the money now, it would almost certainly make better sense to leave things be. Early cash-in values on products like these are always really lean. You could end up losing, I don't know, a third of the value for your impatience - which seems a rather odd thing to do - to me at least.
If you're still determined, I'd phone them back and ask them to send you a copy of the Ts&Cs, and tel you exactly where the restriction they've described appears. If it's there in b/w, that's it. Your only recourse then would be to sell the policies on to a third party that's prepared to wait - I'm sure they can be found with a bit of googling. The flip-side being that then you'd lose even more of your cash.
If you're still determined, I'd phone them back and ask them to send you a copy of the Ts&Cs, and tel you exactly where the restriction they've described appears. If it's there in b/w, that's it. Your only recourse then would be to sell the policies on to a third party that's prepared to wait - I'm sure they can be found with a bit of googling. The flip-side being that then you'd lose even more of your cash.
[QUOTE 2076338, member: 1314"] I phone one up and they said I can’t until I’m 55 because of the Ts&Cs.
Now – there must be some way around this? [/quote]
It's not their T&Cs, it's the legal framework. In return for tax relief on contributions, there has always been a statutory minimum age for drawing your private pension, which is now 55 - http://www.direct.gov.uk/en/Pension...personalpensions/PersonalPensions/DG_10027141
There are exceptions if you have to retire on ill health, or are e.g. a professional sportsman, but if you don't come within one of those all you can do is transfer your fund to another provider.
That is generally a bad idea, because you face fees when you take it out and fees when you put it somewhere else. But not always - some pension plans perform so badly that it can be worth switching if you have several years to go.
PS. I'm assuming that it is what you say it is i.e. a pension plan. In that case you cannot do what SP99 is suggesting, because the law says the plan is personal to you. OTOH if it is simply an investment plan which you regard as a pension and which didn't attract the tax relief on contributions, there is no statutory minimum age. You can cash it in or even sell it to a third party, subject to getting caned on charges. The response to your phone call suggests that it is a pension plan.
Now – there must be some way around this? [/quote]
It's not their T&Cs, it's the legal framework. In return for tax relief on contributions, there has always been a statutory minimum age for drawing your private pension, which is now 55 - http://www.direct.gov.uk/en/Pension...personalpensions/PersonalPensions/DG_10027141
There are exceptions if you have to retire on ill health, or are e.g. a professional sportsman, but if you don't come within one of those all you can do is transfer your fund to another provider.
That is generally a bad idea, because you face fees when you take it out and fees when you put it somewhere else. But not always - some pension plans perform so badly that it can be worth switching if you have several years to go.
PS. I'm assuming that it is what you say it is i.e. a pension plan. In that case you cannot do what SP99 is suggesting, because the law says the plan is personal to you. OTOH if it is simply an investment plan which you regard as a pension and which didn't attract the tax relief on contributions, there is no statutory minimum age. You can cash it in or even sell it to a third party, subject to getting caned on charges. The response to your phone call suggests that it is a pension plan.
asterix
Comrade Member
- Location
- Limoges or York
[QUOTE 2076496, member: 9609"]I think there is possibilities if you can prove ill health - otherwise (99% certain) all pensions have this 55 year old rule (police & fire etc are the only ones exempt) Presumably they don't want people dipping into their retirement funds when ever they feel like it.
Anyway this is a bad time to cash in a pension -[/quote]
There's going to be a good time?
Anyway this is a bad time to cash in a pension -[/quote]
There's going to be a good time?
Ha! I suppose if the OP was going to transfer it to another provider it is cash-neutral (apart from the iniquitous charges). A bit like moving house sideways as opposed to trading up or down.
IMO - and I've thought a lot about this, being almost of pensionable age - most private pension plans are ridiculously overpriced. It doesn't take all that much headscratching to produce as good a result from your own efforts and at a fraction of the admin cost.
byegad
Legendary Member
- Location
- NE England
I'm early retired with a decent works pension, not rich but can do what we want. I also have a Mickey Mouse pension from another job. There was a couple of hundred pounds in it and I get £46/ year which buys a meal, or some tyres for the trike! 
I sympathise but this has been the law for sometime, I have another pension due to pay in 21 months which will be for a similar amount. Yes the few hundreds pounds would have been OK when I left each firm but having drawn the first Mickey Mouse one now for over 6 years I'm not far off getting all my money back with interest.
My wife has her OAP, a works pension and a third one for £85/annum or thereabouts, again the lump for that last one would have been nice but it too was earned under the newer set of rules.
Sadly I think your funds are tied up until you reach 55.
I sympathise but this has been the law for sometime, I have another pension due to pay in 21 months which will be for a similar amount. Yes the few hundreds pounds would have been OK when I left each firm but having drawn the first Mickey Mouse one now for over 6 years I'm not far off getting all my money back with interest. My wife has her OAP, a works pension and a third one for £85/annum or thereabouts, again the lump for that last one would have been nice but it too was earned under the newer set of rules.
Sadly I think your funds are tied up until you reach 55.
Over The Hill
Guru
- Location
- Ridden off into the sunset
I think the "penalty" on withdrawal early is because you got all sorts of tax breaks when the money went in, (expemptions from tax). So basically it is to re-classify it as earnings so it attracts the tax as it would have. If not we would all not have any earnigs but pay it all into a pension and then draw it out.
You used to be able to sell endowment policies for more than their cash-in value. I just googled "sell my pension" and there are bits on doing that or borrowing against it.
Personally I opted out (not that i had been "in" as I was self employed for years) and have bought some houses that I rent out. Even in these times I am very pleased with how it is working out.
You used to be able to sell endowment policies for more than their cash-in value. I just googled "sell my pension" and there are bits on doing that or borrowing against it.
Personally I opted out (not that i had been "in" as I was self employed for years) and have bought some houses that I rent out. Even in these times I am very pleased with how it is working out.
srw
It's a bit more complicated than that...
Yes. One day interest rates will rise above the derisory levels they're at at the moment, and when that happens projections of future returns will rise, and so will surrender values..
One more reason, incidentally, why modern economics has disappeared up its own fundament - it has this magic thing called market consistency which is a complete and utter nonsense and tells you that because interest rates are currently low they will always and for ever be low. Amen.
asterix
Comrade Member
- Location
- Limoges or York
Thanks for the reassurance. I have a tracker ISA taken out on advice 12 years ago. The target illustration - worst case - suggested it would be worth £13,500 today. It's actually estimated at c. £3,600, a value which it has rarely exceeded. I'm sure someone has been making money out of my investment, but it's not me unfortunately. When I phoned them ( Legal and General) to cash in, they went off, to get my details from file, they said, whilst playing me some not very nice music, and never came back. A letter has now been sent.
Hardly surprising that people like Over the hill put faith in housing.
srw
It's a bit more complicated than that...
That's a completely different investment. A tracker ISA is entirely dependent on stock market returns rather than interest rates. Stock market returns have been basically flat over 12 years because of the recession. 12 years ago was the high point of roughly 60 years of more or less continuous growth (with another flatlining period in the late 1960s and the 1970s). Yes, one day they should start growing again.
In fairness to L & G, their trackers are amongst the cheapest on the market, so they will have been making much less on your investment than most other providers; and far less than UK managed funds or pension plans, which generally produce the same performance at three times the price.
I suppose it depends what you track. The UK and European economies may have been flat for several years, but there has been no recession in large parts of the world. Many Indian managed funds or ETFs, for instance, would see you 50% up over the last five years.
My investments have their winners and losers, but altogether I'm about 50% up over eight years, which will do for me. The averagely intelligent person can certainly beat the professionals, because this stuff really isn't rocket science, no matter how much they try to dress it up. We're talking long term equity investment, not Kazakh mining stocks and tip-sheet garbage, and it's actually simple and straightforward. All you need are a broadband connection, a couple of hours a week and common sense.
asterix
Comrade Member
- Location
- Limoges or York
It is a completely different investment, and maybe I should have switched between funds, etc. However 12 years is quite a respectable period and it must be remarkable that things have been flat for so long and with no change in sight.
Fortunately this investment is a single egg in the basket for me, albeit irritating. Dress it up how you like, equity investment is high risk. There have been plenty of nasty surprises for those whose faith in blue chips was rudely shaken by them. I don't invest any more than I can afford to lose (i.e. not a lot).
swee'pea99
Legendary Member
I believe Kazakh mining stocks are actually quite a good long term equity investment...
MacB
Lover of things that come in 3's
- Location
- Farnborough, Hampshire
Go back 12 years and we're talking dot com bubble which, at the time, was viewed as us having reached the height of insanity. The masking, shuffling and borrowing from Peter to pay Paul that went on for the next 7 years is astounding. There are quite a few that believe we're still well short of a full unravelling from dot com, let alone unravelling what came after.
I know it's no help and is only background but dot com came on the back of various shocks, Japan, Asia and Russia being very noteable.
