PENSIONS

michelle · Posted: Sun Aug 01, 2004 6:03 am Post subject: PENSIONS

Have heard somewhere that if and when you transfer your pensions you can get your hands on some of the cash. We have a couple of really small pensions and would prefer to cash them in and do something useful with the money rather than add them to our other larger private pension pots.

They are not final salary schemes, have decided not to touch those

Anybody done this or know of how it can be done.

Michelle

Graham Barnes · Posted: Sun Aug 01, 2004 10:35 pm Post subject:

I'm not sure if you can.
I thought that the deal with pensions is that your contributions are not taxed, but that you have to take out the money as an annuity when you retire.
Getting tax relief and then taking out money whenever you want seems like you get your cake AND eat it, and I doubt that Gordon Brown would be that generous.

You can transfer your pension pot from one provider to another though.

Are you posible thinking about the lump sum which you can get from final salary schemes??

Graham

michelle · Posted: Mon Aug 02, 2004 4:43 am Post subject:

Hi Graham

I have read on another site about transfering pensions into a flexible superanuation scheme. I believe this is offered by most of the banks, it takes about a month and then after a set period of 3 to 6 months you can get your hands on the cash. Sounds too simple but the key seems to be that it has to be a flexible scheme.

There is no way I'm going to rush into transferring my pensions would much rather wait and see how things go in NZ but I have a small amount in a pension which will only pay out about £1000 a year so would rather cash it in if there is a way.

There seemed to be a couple of people on the site who have done it successfully but I remain suspicious.

Michelle

Graham Barnes · Posted: Mon Aug 02, 2004 7:07 am Post subject:

Never heard of these schemes, but then I'm just in a final salary scheme so I wouldn't expect to come across it. But I still can't see how it gets around the tax relief problem though which is imposed by His Tonyness. Surely the Govt would not give you tax relief for your contributions, but then allow you to take out the money for non-pension purposes??
However, I think you're right to tread carefully...if it is possible, watch out for fees charged for doing so (including those for transferring funds as your current provider may charge a "Market Value Adjustment" which is as sinister as it sounds!!)

Would be interested to see how you get on with this...

Graham

michelle · Posted: Mon Aug 02, 2004 9:34 am Post subject:

Hi Graham

Have copied this from the National Bank web site. I suppose you are getting around the tax because you are transferring it to another pension but it just happens to be one that you can access.

Graham Barnes · Posted: Mon Aug 02, 2004 12:08 pm Post subject:

As this is from the National Bank, I presume it is an NZ-based scheme....I thought you were talking about a UK scheme where early withdrawal was possible.
As contributions to NZ pensions are not tax-deductable, perhaps this is why you are allowed to take money out of them early. But is worth checking to see if you would be allowed to transfer a UK pension fund into another run overseas.

'Fraid I can't help you with the lump sum payment though...as a wide guess, perhaps no tax paid because it is paid from the UK and might be covered under double taxation regs???