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Cash from pensions

Community Veteran
Posts: 7,906
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Registered: 02-08-2007

Cash from pensions

Seems that  changes to pensions is either to take place or has already taken place to allow people to take part or all of their pension as a lump sum.
In some ways it could be argued that the money belongs to that person so they should have  a choice of what to do with it but equally there are some people who simply cannot handle a large sum of money and would blow the lot thus leaving the state to look after their future needs.
Was it therefore a good idea to give people this choice ?
124 REPLIES
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Moderator
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Registered: 11-01-2008

Re: Cash from pensions

better that than being screwed with an annuity
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Community Veteran
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Re: Cash from pensions

I think it depends on whether you think you will live for another 20+ years or not, personally I would take the lump sum (my dad died @ 67 & my older brother died @64 so I doubt I would live to see the remainder, SHMBO could still take the money)
But yep some people can't handle large sums of money, I know of one person who won the lottery (couple of Mil!) and within 2 years was back in the housing estate having blown it all.
rongtw
Seasoned Hero
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Re: Cash from pensions

Great Idea  Wink  these big insurance company's  make to much money from our money we save !! its our,s at the end of the day and it should be our choice what to do .
and not be stuck in a low performing pension we cant change, it will make them offer better performing products from now on .
i have one only 15k  i intend to cash in 60 this year and after 5 heart attacks  it will be more helpfull  to me now than stuck in the insurance company's bank account 
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Kremmen
Rising Star
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Registered: 13-04-2013

Re: Cash from pensions

Tricky one. As posted above, some will take it, blow it, and then just have a meagre state pension for the rest of their days. These new DC pensions are certainly nowhere near the older DB pensions and I feel sorry for future pensioners.
You've got Gordon Brown to thank for some of the DB to DC pensions as he changed the rules. If you do go down the annuity route then use a service like the free Which? one to compare costs.
Let's be careful out there !
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Re: Cash from pensions

Mine's been earning interest for over 2 years Cool
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itsme
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Re: Cash from pensions

I thought to be able to take the lot as a lump sum you had to have a minimum pension, which is higher than the state pension.
Community Veteran
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Re: Cash from pensions

If you cash in a pension and don't put it into investment/annuity the only person you are cheating is yourself.
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Community Veteran
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Re: Cash from pensions

I've mixed it up some annuities, some share based ISAS and investment bonds, some cash including pensioner's bonds and some buy for lets.  Cool
And two state pensions for me and SWMBO.
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Community Veteran
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Registered: 20-10-2012

Re: Cash from pensions

When I took VR some 14 years ago (at age 54) I ploughed half of my redundancy back into the Pension Fund.
This was to maximise my income. I did not take a lump sum either. Maximum income was my target!
I was paid my OP from that moment.
Now, we live quite comfortably with my OP and our 2 state pensions!  Cool
Geoff,
York.
nanotm
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Registered: 11-02-2013

Re: Cash from pensions

I was offered the chance to take my pension as a single lump sum 5 years ago but opted instead to leave it with the company that's responsible for paying it, had I taken it as a lump sum I would of had zero monthly income but as I left it where it was I will have exceeded the original offered pension fund amount in another 3 years, with another 27 years till state retirement age (more if it increases in the meantime) I fully expect to get my monies worth out of this pension pot Smiley
of course it should of been worth closer to half a million when they started paying it but GB's raid on pensions changed them from funded to unfunded so they instantly became worth pennies on the pound when they became payable ....
just because your paranoid doesn't mean they aren't out to get you
itsme
Grafter
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Registered: 07-04-2007

Re: Cash from pensions

Are you sure you were offered to take all as a lump sum, if that was the case why the changes in the law now?
nanotm
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Re: Cash from pensions

yeah, mine was issued on medical grounds so there were/are different rules to standard pensions...
the new changes were to undo some of the damage done in the past, you could take your entire pension pot from the current provider as cash until brown screwed the pooch all them years ago.... thank god I got my pension before the latest round of adjustments were brought in as it would only of been worth half as much .....
just because your paranoid doesn't mean they aren't out to get you
itsme
Grafter
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Registered: 07-04-2007

Re: Cash from pensions

Sorry but I can't remember a time when the rules allow the whole being taken out as a lump sum.
nanotm
Pro
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Re: Cash from pensions

its all down to the pension scam your part of, different scams have different rules for different things, early payment provisions have always allowed you to remove your pension pot from the designated provider as a single lump sum to look after yourself or invest with a different provider, invariably your encouraged to do this by the fund managers on the grounds you will be less of a liability to the fund in the years to come (because your pot isn't large enough but they have to continue to pay you your annual amount ....)
standard provisions were until 97 allowing you to take your entire pension as a lump sum or switch providers as you saw fit that changed when brown raided them without a care in the world about who was going to fund things in the future ....
just because your paranoid doesn't mean they aren't out to get you