# SERPS pension at 55



## El Cid (Apr 19, 2014)

I opted out of SERPs many years ago. My pension is now worth £39,000, there is some money in there from a private pension too.
I am now 55 and thinking about cashing in half of this second pension to get a mortgage.
Does anyone understand pensions, probably not, but we all should really.


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## rona (Aug 18, 2011)

I tell you. I've read the bumph and I still don't understand my options apart from the basics 

I'm sure they've made it harder rather than easier so that these companies can fleece us even more 

https://www.pensionwise.gov.uk/?utm...n/articles/options-for-using-your-pension-pot


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## Lilylass (Sep 13, 2012)

A bit more than most ..... but tbh I'd really go and speak to an IFA about it - there are so many ins / outs that it's really worth taking expert advice on it


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## rona (Aug 18, 2011)

Lilylass said:


> A bit more than most ..... but tbh I'd really go and speak to an IFA about it - there are so many ins / outs that it's really worth taking expert advice on it


Both my friend and I have found IFAs rather useless over the years as they seem to have a set criteria and don't seem to listen or be able to even envisage that others have different needs and wants to their own
The ones I've seen over the years have got me into all sorts of situations I really didn't want to be in


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## Charity (Apr 17, 2013)

Things have changed quite a bit since I got a pension and seem a lot more complicated. I got an hour's free advice at the time from a financial adviser. I do think you need to speak to someone if you don't understand it thoroughly (neither did I) and its more complicated involving a mortgage.. Dealing with large amounts of money is scary. Just make sure its someone reputable and don't be swayed to doing anything you don't feel happy with.

http://www.moneysavingexpert.com/savings/best-financial-advisers#when

or you could speak to a Citizens Advice Bureau adviser which is free
https://www.citizensadvice.org.uk/debt-and-money/pensions/


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## Lilylass (Sep 13, 2012)

rona said:


> Both my friend and I have found IFAs rather useless over the years as they seem to have a set criteria and don't seem to listen or be able to even envisage that others have different needs and wants to their own
> The ones I've seen over the years have got me into all sorts of situations I really didn't want to be in


Which is why you need to be careful to choose one who specialises in the area you need advice in

If you're not able to get personal recommendations (still the best imho) then try the links @Charity has give or do.e useful info here http://www.pensionsadvisoryservice....ics/top-tips-for-your-pension/choosing-an-ifa


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## rona (Aug 18, 2011)

Lilylass said:


> Which is why you need to be careful to choose one who specialises in the area you need advice in
> 
> If you're not able to get personal recommendations (still the best imho) then try the links @Charity has give or do.e useful info here http://www.pensionsadvisoryservice....ics/top-tips-for-your-pension/choosing-an-ifa


I did see ones specialising. I even reported one to the Ombudsman but he had done most of his dealings over the phone to the provider and therefore any proof of my complaint had not been recorded and of course the paper work looked fine


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## Lilylass (Sep 13, 2012)

rona said:


> I did see ones specialising. I even reported one to the Ombudsman but he had done most of his dealings over the phone to the provider and therefore any proof of my complaint had not been recorded and of course the paper work looked fine


just because you've had one bad experience doesn't mean you will again in the future or that it's a good idea to try to 'go it alone' with these sorts of things if you aren't an expert in it & know exactly what you're doing


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## rona (Aug 18, 2011)

Lilylass said:


> just because you've had one bad experience doesn't mean you will again in the future or that it's a good idea to try to 'go it alone' with these sorts of things if you aren't an expert in it & know exactly what you're doing


if it was just one experience then I'd agree, but between myself and my friend who is even older than me, but with the same outlook and priorities, we have had mutiple inappropriate advice.

Yes the advice given may have suited others but not us


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## Lurcherlad (Jan 5, 2013)

Lilylass said:


> Which is why you need to be careful to choose one who specialises in the area you need advice in
> 
> If you're not able to get personal recommendations (still the best imho) then try the links @Charity has give or do.e useful info here http://www.pensionsadvisoryservice....ics/top-tips-for-your-pension/choosing-an-ifa


Indeed, and don't do anything until you have gone away with all the info and studied it, even got someone else's opinion.

Defo don't sign up to anything straight away and until you're completely happy.


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## Lilylass (Sep 13, 2012)

rona said:


> if it was just one experience then I'd agree, but between myself and my friend who is even older than me, but with the same outlook and priorities, we have had mutiple inappropriate advice.
> 
> Yes the advice given may have suited others but not us


So where would you suggest people go for info / advice then?


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## El Cid (Apr 19, 2014)

Lilylass said:


> A bit more than most ..... but tbh I'd really go and speak to an IFA about it - there are so many ins / outs that it's really worth taking expert advice on it


The amount of my pension (£39k) is the baffling thing people cannot believe. I paid in £20 a month for a few years, and then payments from opting out of the second pension.
Although it has had a lot of years to gain interest, more than 20.
A friend of a friend is a benefits/pensions worker, may get some info there, he aid it was a large amount. I saw a IFA about a mortgage, he did not highlight all the money I was sitting on.
I will be getting in touch with my pension company to check the amount; I think the transfer value is the same as cash-in value.


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## El Cid (Apr 19, 2014)

In 2003 it was worth £17, that is a good increase.


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## steveshanks (Feb 19, 2015)

From what i understand you can cash 25% tax free and any more is taxed at your current rate, also take into account (and i'm not to sure on this bit) that the taxed portion + any earnings in the same year may take you over the limit and take you up a tax bracket


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## foxiesummer (Feb 4, 2009)

What about that Martin Lewis chap off the telly. He seems to have things sussed.


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## westie~ma (Mar 16, 2009)

Personally I'd get in touch with http://www.pensionsadvisoryservice.org.uk/

I think its these that Paul Lewis from the MoneyBox on radio 4 always gets in.

Failing that tweet Paul Lewis himself, very active on twitter.

I've only got my state pension and a very small personal one from when I worked. I don't really trust pensions the rules keep changing and my lifestyle isn't conventional enough for a steady pension pot.


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## DoodlesRule (Jul 7, 2011)

You can take 25% tax free, the other £9750 would be taxed - when that is added to any salary you earn it could push you into the higher rate tax bracket.

Presumably your policy is the old rebate only personal pension, meaning it won't have the options for all the newer rules so you would have to transfer to a newer style policy which will incur costs


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## Satori (Apr 7, 2013)

Actually if you draw down half and do nothing with the rest, you will absolutely NOT get 25% of the total pot tax free. You will only get 25% of the amount you draw down tax free in the current tax year.

So, if you draw 19500 then 4875 will be tax free and 14625 will be added to you taxable income.


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## rona (Aug 18, 2011)

Satori said:


> Actually if you draw down half and do nothing with the rest, you will absolutely NOT get 25% of the total pot tax free. You will only get 25% of the amount you draw down tax free in the current tax year.
> 
> So, if you draw 19500 then 4875 will be tax free and 14625 will be added to you taxable income.


So if you draw down and your total income is still less than £11,000 which is the tax threshold
and you do the same every year under the tax threshold, you can get all your pension pot tax free?


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## DoodlesRule (Jul 7, 2011)

Satori said:


> Actually if you draw down half and do nothing with the rest, you will absolutely NOT get 25% of the total pot tax free. You will only get 25% of the amount you draw down tax free in the current tax year.
> 
> So, if you draw 19500 then 4875 will be tax free and 14625 will be added to you taxable income.


Sorry but that is incorrect - under current rules you may take the tax free allowance either upfront as a single tax free lump sum, or as the tax free portion of a number of withdrawals


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## El Cid (Apr 19, 2014)

It seems that I should transfer all the pension to a drawdown policy, if the Pru offer one.


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## Mum2Heidi (Feb 17, 2010)

I've been lurking, trying to remember what my OH did.
He took a lump sum (pretty sure tax free) and bought an annuity with the remainder. Sadly he passed away but it was set up so that I get the full annuity in 2021.
It's with MetLife on advice from a very good IFA.
Hope this helps in some way.


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## El Cid (Apr 19, 2014)

I think that is what you do, take it all; and take some in cash and transfer the rest to another investment.


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## Satori (Apr 7, 2013)

rona said:


> So if you draw down and your total income is still less than £11,000 which is the tax threshold
> and you do the same every year under the tax threshold, you can get all your pension pot tax free?


Yes.


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## Satori (Apr 7, 2013)

DoodlesRule said:


> Sorry but that is incorrect - under current rules you may take the tax free allowance either upfront as a single tax free lump sum, or as the tax free portion of a number of withdrawals


A little knowledge is a dangerous thing I see.

If you do take the tax free single lump sum you MUST do something about the rest. Try actually reading my post and then looking at the rules a little more closely than you have.

This is from HMRC...

"
In most schemes you can take 25% of your pension pot as a tax-free lump sum. You'll then have 6 months to start taking the remaining 75% - you can usually:


get regular payments (an 'annuity')
invest the money in a fund that lets you make withdrawals ('drawdown')
"

If you just draw 25% as a lump sum (without ensuring the balance is in an appropriate qualified vehicle) it will be treated as the first of a series of partial withdrawals. Same if you just draw 50%.

This from UK Gov pensionwise (the link Rona posted) makes it even clearer...

"
*Take cash in chunks*
*Overview*
You can take smaller sums of cash from your pension pot until it runs out. How much you take and when you take it is up to you.


You decide how much to take and when to take it.
Your 25% tax-free amount isn't paid in one lump sum - you get it over time.
Each time you take a chunk of money 25% is tax free and the rest is taxable.
Some pension providers charge a fee to take cash out.

Not all providers offer this option. If your current provider doesn't offer it, you can transfer your pot to another provider but you might have to pay a fee.
"

My post was absolutely correct.


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## Satori (Apr 7, 2013)

El Cid said:


> I think that is what you do, take it all; and take some in cash and transfer the rest to another investment.


Correct.


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## DoodlesRule (Jul 7, 2011)

Satori said:


> *A little knowledge is a dangerous thing I see*.
> 
> If you do take the tax free single lump sum you MUST do something about the rest. Try actually reading my post and then looking at the rules a little more closely than you have.
> 
> ...


Your first comment is indeed very true!! Whats your job Satori?


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## Satori (Apr 7, 2013)

DoodlesRule said:


> Your first comment is indeed very true!! Whats your job Satori?


Not biting. You wouldn't believe me anyway. Really you wouldn't. But, my credentials would shock you.

Face it. You posted crap information. And yes, I am well aware of what your job is. But that just proves Rona's point that one ought to be careful about 'professional' advisors, especially incompetent ones.

Over and out.


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## DoodlesRule (Jul 7, 2011)

Satori said:


> Not biting. You wouldn't believe me anyway. Really you wouldn't. But, my credentials would shock you.
> 
> Face it. You posted crap information. And yes, I am well aware of what your job is. But that just proves Rona's point that one ought to be careful about 'professional' advisors, especially incompetent ones.
> 
> Over and out.


Why so rude and aggressive.

Look back to El Cids comments concerning drawdown - your inaccurate post does not relate to a drawdown contract, maybe your shocking credentials don't stretch that far


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## Brrosa (Mar 21, 2016)

@DoodlesRule - just checking, are you saying the HMRC rules copied into Satori's post are inaccurate?


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## DoodlesRule (Jul 7, 2011)

Brrosa said:


> @DoodlesRule - just checking, are you saying the HMRC rules copied into Satori's post are inaccurate?


No not inaccurate just incomplete - a little knowledge is indeed a dangerous thing! Satori claimed _"Actually if you draw down half and do nothing with the rest, you will absolutely NOT get 25% of the total pot tax free"_ to use Satori's phrase that is crap information, as is "_If you do take the tax free single lump sum you MUST do something about the rest" . _In the appropriate policy offering the relevant options you can draw the tax free cash only and leave the balance invested until such time you want to take an income

A drawdown contract offers more flexible options on withdrawal, you can take just tax free cash and no income or income at various levels etc. Costs are higher though so not usually recommended for pension funds of less than 100k


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## Brrosa (Mar 21, 2016)

DoodlesRule said:


> No not inaccurate just incomplete - a little knowledge is indeed a dangerous thing! Satori claimed _"Actually if you draw down half and do nothing with the rest, you will absolutely NOT get 25% of the total pot tax free"_ to use Satori's phrase that is crap information, as is "_If you do take the tax free single lump sum you MUST do something about the rest" . _In the appropriate policy offering the relevant options you can draw the tax free cash only and leave the balance invested until such time you want to take an income
> 
> A drawdown contract offers more flexible options on withdrawal, you can take just tax free cash and no income or income at various levels etc. Costs are higher though so not usually recommended for pension funds of less than 100k


I think Satori was also saying you have to do something with the rest as otherwise it will be treated as a partial drawdown.


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## El Cid (Apr 19, 2014)

I am beginning to think that it might be better to use most of the £39k pension as a deposit for the mortgage.
Then I would only need a £30k mortgage, and I still have the main state pension and my works pension.


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## rona (Aug 18, 2011)

El Cid said:


> I am beginning to think that it might be better to use most of the £39k pension as a deposit for the mortgage.
> Then I would only need a £30k mortgage, and I still have the main state pension and my works pension.


If it was my choice, that's what I would do. You need to live for today, tomorrow you may not be here.

The money you would save on mortgage repayments could be either spent, put aside for the future or a bit of both


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## rona (Aug 18, 2011)

Or
You could work less


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## El Cid (Apr 19, 2014)

It important to note that basic State Pension eligibility is not affected by
adjustments for time spent contracted-out. The most you can currently get is £119.30 per week.
I have just done a gov.uk pension forecast, I will get £155 per week, in 2029


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## Polaris (Apr 2, 2017)

Hi I am 55 later on this year got £35k in the pot, I don't work anymore I would be 25% tax payer if I did, can I get all this cash or just 25% of it, I been told different story's,


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## steveshanks (Feb 19, 2015)

I just started the ball rolling on mine, 55 this Friday, from what I've been told (and this varies on the type of pension, health etc) you can cash the whole sum in 25% will be tax free and the rest will be taxed, so you would get £8750 tax free and if you have no other earnings pay 20% tax on the rest giving you £21000 after tax and £29750 all together........The catch is because you are over £30000 you must have a financial adviser look at it and give you advice, now i have been told i need an advisor many times but only once been told that he doesn't need to approve it, just sign that he gave advice, so that something you need to check up on. Also my advisor told me the tax people will charge you 45% because they think your getting the money every month, then they will refund you eventually (can take a year). The only way to take 100% tax free is if you have a serous medical complaint, like less than a year to live.

Next is a cash out retirement plan, with this you can take your tax free lump sum then take the rest in annual or monthly payments over 3 or more years, if you have no other income you could take yours over 3 years at about £8750 a year, again financial adviser is needed.

Before i forget the Financial advisor will want a cut, i was quoted 5% of the pot for an annuity, may be less or more for the 2 above

Last and the option i took is an Annuity, you may have a guaranteed annuity with your pension, which means you get a higher rate and may get more if you have any medical issues, you would get your 25% tax free then a monthly (or annual) payment till you die, now this payment can vary a lot depending whether you get it in advance or you want a spouse to get it after you die etc. but if my figures are anything to go by you may be looking at about £90-£100 a month. I get more because i am a fat smoker so be honest with them, they will/may check with your doctor. This doesn't need an advisor.

Above all do research, i went in thinking i could cash my pot in and it was such a disappointment to find out how it worked and what i got, first place to look is here
https://www.pensionwise.gov.uk
and here to get a guesstament of your pension
https://www.aviva.co.uk/retirement/tools-and-calculators/pension-annuity-calculator/


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## Polaris (Apr 2, 2017)

Thanks for the quick reply Steveshanks, I wondered if I could have 11k a year for 3 years so that would be my tax allowance each year of 11k a year,with the idea of not paying tax as I would not go over 11k a year.i will have chat with the pension company Phoenix Life.


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## steveshanks (Feb 19, 2015)

But remember the first 25% is tax free anyway, so the first year you could get £17000 without paying tax,(8750 tax free then your first annual payment of 8750) then £8750 a year after that.......... speaking to them will be best thing to do, but remember other companies may be able to give you a better deal, or some advisors may be cheaper


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## rona (Aug 18, 2011)

Polaris said:


> Thanks for the quick reply Steveshanks, I wondered if I could have 11k a year for 3 years so that would be my tax allowance each year of 11k a year,with the idea of not paying tax as I would not go over 11k a year.i will have chat with the pension company Phoenix Life.


This is what I would like to do, so would be interested in your answer.
I've just looked on the government site and filled it in and it does seem to indicate that it can be all tax free


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## Polaris (Apr 2, 2017)

Ok Cheers I will chat to them.thanks again.


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## steveshanks (Feb 19, 2015)

Just please please be careful, I wouldn't say i had bad advice from my pension holders (as they can't give advice) but they certainly forgot to tell me a lot of things. Also to do this cashout retirement plan you will need an advisor to sign a form. L&G told me i didn't but they where giving me the money from another company (they handle the annuities for them) who did, I was quoted 5% for an advisor to get me the best annuity so no idea what one would charge for this but please take into account they will charge you, and may be reluctant to sign ans the whole pension sector is terrified of getting into a "Bad advice" PPI situation.
here are the tax figures.
https://www.gov.uk/government/publi...d-tax-credit-rates-and-thresholds-for-2017-18
and here is a cash out retirement plan blurb
https://www.legalandgeneral.com/retirement/our-products/cash-out-retirement-plan/


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## El Cid (Apr 19, 2014)

steveshanks said:


> Also to do this cashout retirement plan you will need an advisor to sign a form.


The Prudential are being very helpful and no advisor required for me.


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## El Cid (Apr 19, 2014)

If you need advise, you can book a free appointment with Pensionwise, a Government backed organisation.


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