Desparate for some extra cash and I've found an old pension. Can I cash it in?

(8 Posts)
chicaguapa Thu 21-Mar-13 20:33:50

Definitely not. The earliest you can 'cash it in' is age 55. Anything that tells you something different is illegal and will subject you to massive tax charges. You got tax relief on the money you paid in, so HMRC gets to say when you can get it back.

£190 doesn't sound a lot from £2,500 does it? But if you put £2,500 in the bank and took out £190 each year, how long would it last? Instead the £190 pension from the insurance company will be paid every year until you die, even if you live to be 110. Which is why pensions are so expensive now because insurance companies expect people to live longer. And it gives you an idea of how much you actually need in a pension to pay out a decent income after you stop working. Very scary!

pcc Thu 21-Mar-13 20:22:33

Thank you nannynick. I'll have to think of something else then. I'll leave it or at least move it to my current pension. smile

Apologies, but I've posted this in Money too, because I wanted a quick reply.

Ilovemydogandmydoglovesme Thu 21-Mar-13 20:18:41

As far as I know you can either freeze it or move it. I don't think you can just cash them in, sorry. If it was cashable it would be an ISA or something. I thought pensions were designed to accumulate? I'm pretty sure they're governed by particular rules.

nannynick Thu 21-Mar-13 20:16:34
pcc Thu 21-Mar-13 20:13:23

Thanks, it does say on the latest statement the difference between leaving it and taking it elsewhere. It's not a huge difference.

I know it's not the greatest of moves, but I'm desperate. And I have (and DH has) a good pension going now. This is from back when people started opting out of SERPS back in the early 90's. I think I stopped paying in, in about 1993 and we both took others with our jobs then.

Given what we've got in place now, we'll not miss it.

Thanks for your help. It might just be the light at the end of the tunnel. I'll give them a ring tomorrow. smile

nannynick Thu 21-Mar-13 20:13:10

Pensions are not designed to be surended, they are designed to mature at retirement age. So you may find your provider does not provide any way for you to get any of the money early. However it is worth digging out the paperwork, call the provider and ask.

SimoneDeBeaver Thu 21-Mar-13 20:07:17

I think it is, but I also think you will have to pay a large chunk in tax - because the govt will have made contributions to it too.

pcc Thu 21-Mar-13 19:59:49

It's got about £2,500. Haven't paid in for years and years. It's return at retirement age is £190 a year.

I have another very good work based pension now, which I've paid into for a long time, so I wouldn't miss it, but I do need it now.

Anyone know if that's possible?

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