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[moggy]

Hi to all on OOF,before i ask for professional advice.I just wanted to ask if anyone on hear has cashed in a pension early.And what might be the good and the bad of it,to cut a long story short.Me and the wife have lost our jobs again(laid off)and are struggling to find work,so to keep a roof over our heads.I was thinking about cashing my pension in its about £26000,but i have no idea what the ramifications of this would be.Just wanted to ask if any of you guys had done this,or know if its a good idea.Any input would be appreciated,Dean 

[Paddy Flannery]

Sorry to hear of the awful position you both find yourselves in.

First and foremost, speak to your mortgage provider and explain the situation to them. Then find a local pension advisor, who'll know the ins and outs of this. You may find that they will afford you one hours advice for free.

Just be up front with creditors who need to know. Mortgage, any secured loans, other loans, Gas, leccy etc.

Good luck with it all.

[moggy]

Sorry to hear of the awful position you both find yourselves in.

First and foremost, speak to your mortgage provider and explain the situation to them. Then find a local pension advisor, who'll know the ins and outs of this. You may find that they will afford you one hours advice for free.

Just be up front with creditors who need to know. Mortgage, any secured loans, other loans, Gas, leccy etc.

Good luck with it all.

Thanks for the reply mate,much appreciated.We are renting privately so after this month,we have no money for next month.So the landlord will want us out.My thinking is if i cash the pension in i can keep the roof over our heads,until we find work again.Dean

[omega2018]

yes do get advice it's much better regulated than it used to be (it used to be 'put your money here and I will get all of the first few years interest as commission thank you very much').

if it is a final salary pension be especially careful, probably get several lots of advice. 

assuming it is instead a defined benefit scheme and you are over 55 check any transfer out fees but consider putting it into a SIPP where you can invest it as you like in funds/shares/bonds, take 25% as tax free cash and thereafter as much as you like out as cash, ideally just enough to stay below the £10K per person tax threshold so it will be tax free as well.

also if you don't pay tax now there is a nice little earner where you can pay in £2,880 each year, tax man adds £720 and you can then withdraw  both sums a few weeks later - £3,600 tax free if you stay below the £10K threshold, and NI free anyway.

also check you have a full state pension coming http://www.gov.uk/check-state-pension if not might be worth topping up your contributions

[moggy]

yes do get advice it's much better regulated than it used to be (it used to be 'put your money here and I will get all of the first few years interest as commission thank you very much').

if it is a final salary pension be especially careful, probably get several lots of advice. 

assuming it is instead a defined benefit scheme and you are over 55 check any transfer out fees but consider putting it into a SIPP where you can invest it as you like in funds/shares/bonds, take 25% as tax free cash and thereafter as much as you like out as cash, ideally just enough to stay below the £10K per person tax threshold so it will be tax free as well.

also if you don't pay tax now there is a nice little earner where you can pay in £2,880 each year, tax man adds £720 and you can then withdraw  both sums a few weeks later - £3,600 tax free if you stay below the £10K threshold, and NI free anyway.

also check you have a full state pension coming http://www.gov.uk/check-state-pension if not might be worth topping up your contributions

Thanks for that,much appreciated.I don't know if it will make any sense but both me and the wife opted out of serps,in 1990.We have a unity personal pension plan with friends life,it used to be with with winterthur.But friends life now have the business as it was sold to them. You are right i need to seek professional advice,but as i am only 54 this may not be a viable option.Dean

[jonathanh]

under 55 you cannot access your pension (well the kind you have anyway) unless you are in pretty bad health and cannot work. 

As to advice, it does not come cheap I'm afraid.   but do you need advice?  Advice means that someone understands your circumstances and tells you what to do.  Information come for free -the best thing to do it to hit google yourself and read around.  also make friends life work for you, look at their website to see what they offer, phone them up etc - they should have a helpline.  A few more thoughts

1) essentially when you draw your money, 25% is tax free, 75%is taxed at your marginal tax rate.  so take your £26k in one go then you'll pay income tax on it, spread it out and you might not depending on what else you earn (e.g. take it over 4 years at £6.5k pa gives £5k subject to income tax - no other income means no tax to pay

2) take an income for life and 25% tax free cash?  so take £6500 as tax free cash and then buy a lifetime income for yourself, you'll get £750 per annum.  not saying its a bad deal but that's the kind of number you might look at

3) also look at the charges in anything you choose.  the "total expense ratio" or AMC.  if you pay 1.5% per annum it does not sound much but after 10 years that's 15% of your pot.

HTH

[05omegav6]

Legally you cannot cash a pension before 55... So sounds like you might need other options.

Plenty of work around here if you have a driving licence

[Mister Rog]

Oh dear. There's lots of advice here, but most of it is as confusing as hell.

I hate any discussion about pensions, as most of it I fail to understand, and the other bit guarantees that sombody will take some of it like independant "advisors".

This is a tough call. I really wish I had a nice simple answer. 

[moggy]

Legally you cannot cash a pension before 55... So sounds like you might need other options.

Plenty of work around here if you have a driving licence

Hi HKT,thanks for the advice.You have all ways given me good advice and tried to help,and for that i thank you and all on OOF.So it looks like my pension option is out of the question,I have a clean license but i am a long way from you mate.I know many of you on this forum,will understand when i say.I sit hear crying about my wife and my cats future,as many of you have been through the same and worse.I suppose the old saying is true,life is shit and then you die.But i can say that all of you on this forum,are kind gentle caring human beings.I have met some people personally and they have helped,me with keeping my car on the road.Both hands on and on hear with advice and suggestions.Good luck for the future,Kind Regards Dean.

[moggy]

Oh dear. There's lots of advice here, but most of it is as confusing as hell.

I hate any discussion about pensions, as most of it I fail to understand, and the other bit guarantees that sombody will take some of it like independant "advisors".

This is a tough call. I really wish I had a nice simple answer. 

Me to mate,but thanks for your input.

[05omegav6]

Starter for ten...

http://www.tesco-careers.com/JobDetails/122188.aspx?utm_source=Indeed&utm_medium=organic&utm_campaign=Indeed

[LC0112G]

Thanks for that,much appreciated.I don't know if it will make any sense but both me and the wife opted out of serps,in 1990.We have a unity personal pension plan with friends life,it used to be with with winterthur.But friends life now have the business as it was sold to them. You are right i need to seek professional advice,but as i am only 54 this may not be a viable option.Dean

There is little point in seeking professional advice since you CANNOT access the money in your pension until you are 55.

A SERPS contracted out pension will be a pot of money invested in something with Friends Life. An IFA may be able to advise you on some better/cheaper investments so that the money will grow quicker, but they won't be able to help you cash it in. However, £26K is on the low side for someone aged 54, so making it cost effective may be tricky.

Although it may not seem like it now, the rules are there to stop anyone having a claim on your pension - you can go bankrupt and still keep all your pension, creditors cannot claim on them.

I'd suggest getting over to the Money Saving Expert message boards and asking for help there to make sure you're claiming all the benefits you're entitled to.

[moggy]

Starter for ten...

http://www.tesco-careers.com/JobDetails/122188.aspx?utm_source=Indeed&utm_medium=organic&utm_campaign=Indeed

Thanks mate,but i need full time hours.We have to payout approximately £1200 per month for rent and bills.So unfortunately that wont cut it.  Regards Dean

[moggy]

Thanks for that,much appreciated.I don't know if it will make any sense but both me and the wife opted out of serps,in 1990.We have a unity personal pension plan with friends life,it used to be with with winterthur.But friends life now have the business as it was sold to them. You are right i need to seek professional advice,but as i am only 54 this may not be a viable option.Dean

There is little point in seeking professional advice since you CANNOT access the money in your pension until you are 55.

A SERPS contracted out pension will be a pot of money invested in something with Friends Life. An IFA may be able to advise you on some better/cheaper investments so that the money will grow quicker, but they won't be able to help you cash it in. However, £26K is on the low side for someone aged 54, so making it cost effective may be tricky.

Although it may not seem like it now, the rules are there to stop anyone having a claim on your pension - you can go bankrupt and still keep all your pension, creditors cannot claim on them.

I'd suggest getting over to the Money Saving Expert message boards and asking for help there to make sure you're claiming all the benefits you're entitled to.

Hi mate thanks for that,but we are not claiming benefits,and we declared our self bankrupt in 2008.

[05omegav6]

Starter for ten...

http://www.tesco-careers.com/JobDetails/122188.aspx?utm_source=Indeed&utm_medium=organic&utm_campaign=Indeed

Thanks mate,but i need full time hours.We have to payout approximately £1200 per month for rent and bills.So unfortunately that wont cut it.  Regards Dean

Is moving an option?

https://www.ocsjobs.co.uk//templates/OCS_vetting/jobdetail/30013.aspx/Jobs/Mini-Bus-Driver-Passenger-Assistance

With both of you working, will clear £2,200 pm