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Pension Drawdown

  • fileygirl
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22 Feb 08 #14751 by fileygirl
Topic started by fileygirl
Hi All

First of all a massive thanks to Maggie :cheer:

My partner got his adjournment today due to the fact that his stbx's sol sent the Statement of Open Proposal out 1st class and the postal service has lost it. I love Royal Mail. Anyway, a quick question to anyone who can help.

His stbx wants a 50% share of his pension and is under the impression she can take this (for arguments sake £60k) put it in another pension fund and then 2 days later draw it out to buy a house. Is this is the case after all how can she draw physical money on something that will not come into maturity for another 12 years. I was also under the impression that to have an income drawdown pension you have to have more than £100k in it.

Can anybody please answer these questions so that we are clear when we go to FH. Partner will be self repping.

Many thanks

  • maggie
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24 Feb 08 #14913 by maggie
Reply from maggie
IF ONLY ......
You can't swap the whole CETV of a pension you got by sharing on divorce for cash -
You can't take a pension from it until age 60 at the earliest: www.opsi.gov.uk/acts/acts1999/ukpga_1999..._6#pt4-ch1-pb4-l1g37
101C Basic principle as to pension credit benefit

(1) Normal benefit age under a scheme must be between 60 and 65.

(2) A scheme must not provide for payment of pension credit benefit in the form of a lump sum at any time before normal benefit age, except in such circumstances as may be prescribed.
[ie terminal illness....]
So the best she could get would be 25% tax free cash at her age 60 - the rest paid as her pension.
Income Drawdown is classed as taking your pension into payment, even though you can leave all of it invested [ie going down fast?] so for a pension got on divorce - no tax free cash from that until her age 60 and then 25% of CETV max [unless rules change]

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