Just curious, at what age can a person starting cashing in their private pension without penalty?
Thanks,
Roland.
Just curious, at what age can a person starting cashing in their private pension without penalty?
Thanks,
Roland.
In message , Ichthys writes
That will depend on each individual contract. Penalties are a matter between you and your pension company.
HMR & C, on the other hand, have their own rules which sit on top of your pension providers rules. Unless you are in a very special occupation then you cant get at your pensions pile before you are 50, and that will become 55 next year.
Bastards. Is that a retrospective change ?
Daytona
A friend of mine is an ex-IFA and, before he jacked it in to become a copper, told me that a lot of his work in recent times came from "pension busting" whereby he dissolved pension plans. Obviously this involved paying some tax to the IR but the net effect was the client got his hands on the pension fund before the age of 50.
I don't know the ins and outs of it, nor whether it was using a loophole which has now been closed, but this was only a couple of years ago.
Regards
Neil
Depends what you mean by retrospective - if you're already drawing a pension, they obviously can't require you to un-purchase an annuity. However it is definitely retrospective w.r.t. conditions that applied when you started building your pension pot.
This can probably still be done. I haven't heard of the version that pays tax to the Revenue; the version that has been going around involves transferring the pension fund (personal pension this is, not State pension) to another country where the rules are a lot less strict. Once it's over there, you can just draw it out.
IF you actually moved to the said country, there would be nothing illegal about this as far as the UK is concerned. The great trick was that it could be done with you remaining in the UK.
But the fee was substantial - I was once quoted something like a 10% cut, and they wouldn't do it with funds below £150k. I also recall that there was a dodgy element in it, in that the money would pass through the hands of somebody who could just run off with it.
As has been stated here many times, a personal pension is just one investment vehicle, and isn't essential to have. In your old age, you don't need a pension. You just need money :)
These schemes were severely frowned upon by OPRA and the Inland Revenue, partly because a large chunk of the pension fund disappeared in the process.
Rob Graham
That may well be so, but the received wisdom is that once one's money is in a pension plan there is no way to get it out again before the age of 50. Clearly, if one can still "bust" pensions, it's not true.
Neil
In message , Neil Jones writes
Doesnt sound right to me. Perhaps thats why he is no longer an IFA.
It could be pension drawdown, but that is still post 50.
John, IIRC, although the age rules change next year, 50 is still an option until 2010 when it becomes 55?
Unlike Equitable Life where a large chunk of pension fund disappears but that is ok.
Kevin
In message , Doug Ramage writes
Yes, you are right!
There are various methods of questionable legality involving transferring the money to offshore funds.
No, that was not OK, but for different reasons.
Rob
Which reminds me of something I mentioned on this newsgroup about two years ago. One of my SIPP provider's clients had turned 75 and was dragging his heels over liquidating his SIPP's assets and purchasing an annuity. Without his signature nothing could move.
He died about a year ago at the age of 77 and his wife inherited his SIPP... intact.
Glad to hear that someone's causing the IR some trouble for a change.
btw - I've just read A Forest of Eagles. The detail of the escape & evasion in the first part got me thinking how much more interesting Ray Mears survival books would be if they were written as novels (albeit highly detailed).
Daytona
Can you post any pointers, rather than saying "I know something you don't but I am not telling you hehehehe" :)
Can one really do that? Normally the SIPP would be a part of one's estate. Unless written in trust.
But one can write ordinary personal pensions in trust too, so (if death occurs before drawdown) the fund passes to the beneficiary minus a 35% tax charge.
Not sure how somebody could inherit a SIPP "intact".
I don't know the exact details of how the scam works, but I do know that it involves things like claiming you are leaving the country, moving the funds to an offshore pension fund, and then withdrawing it from there.
You do end up losing a lot of money in tax and charges.
Didn't sound right to me either, but there you are. I said something like "Surely the IR would have something to say about that" to which he replied something like "They don't have a choice. They have to do it." Next time I see him I'll ask home how it worked.
No.
Regards
Neil
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