Cashing in Pension

Just curious, at what age can a person starting cashing in their private pension without penalty?

Thanks,

Roland.

Reply to
Ichthys
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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.

Reply to
john boyle

Bastards. Is that a retrospective change ?

Daytona

Reply to
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

Reply to
Neil Jones

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.

Reply to
GSV Three Minds in a Can

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 :)

Reply to
Postman Pat

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

Reply to
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

Reply to
Neil Jones

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.

Reply to
john boyle

John, IIRC, although the age rules change next year, 50 is still an option until 2010 when it becomes 55?

Reply to
Doug Ramage

Unlike Equitable Life where a large chunk of pension fund disappears but that is ok.

Kevin

Reply to
kajr

In message , Doug Ramage writes

Yes, you are right!

Reply to
john boyle

There are various methods of questionable legality involving transferring the money to offshore funds.

Reply to
Jonathan Bryce

No, that was not OK, but for different reasons.

Rob

Reply to
Rob graham

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.

Reply to
JF

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

Reply to
Daytona

Can you post any pointers, rather than saying "I know something you don't but I am not telling you hehehehe" :)

Reply to
Postman Pat

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".

Reply to
Postman Pat

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.

Reply to
Jonathan Bryce

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

Reply to
Neil Jones

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