What to do with pension pot?

[sunset900]

Looking for advice on what I should do with an old pension I have and whether my potential plan is even possible.

I have a final salary pension pot from years ago (old job) with about £55k in it. I currently rent with no ability to save a deposit, although I could afford a mortgage.

Can I have this pot as cash for a deposit? If not, should I transfer it into my current defined contribution scheme and what do I need to consider in my decision.

My current pension is not huge but this becomes more of an issue if I am still renting at retirement (about 25 years away).

For most pensions you’ll need to be 55 to access them. Although this age is set to rise to 57 in 2028.

It’s not usually advisable to transfer a final salary or defined benefit pension to a defined contribution scheme - generally you’ll tend to lose out. It’s often possible to do, but worth getting advice about. And in some cases you’ll need advice before being able to transfer.

If your retirement is 25 years away then that sounds like you are about 40 years old or so? In which case the answer to your first question is no, you cannot use it as a cash deposit for a house. You cannot normally access pensions until you reach age 55 (except in very special circumstances; to so otherwise incurs very hefty unauthorised access penalties - don't go there!)

There have been recent regulatory changes to the pension transfer advice process. This is because for most people a transfer is thought likely to not be in their best interests, especially where they have limited other assets to provide them with an income in retirement and they have limited knowledge and experience of investments. The FCA has tightened up on how transfer advice is delivered and paid for and you will struggle to find a decent pension transfer specialist who will engage with you. Most will simply not even consider looking at a case where the scheme member is not retiring within the next 12 months, unless there are some other exceptional circumstances in play. From what you've described I cannot see that you fall into that category.