Can I draw pension at 51 or will I have to wait?

I have been offered a portion of my husband's pension but I need cash now. His pension is in payment so will I be able to draw on it now or will I have to wait until I am 60 or 65? Thanks

There are two things you need to be aware of here.

Firstly, if you are able to take an external transfer from your husband's pension and this can be completed before 5 April 2010, as you age 51 you would be able to draw a pension. If you are entitled to an internal transfer within your husband's pension you may need permission from them to draw the benefits. From 6 April 2010 the earliest age at which you can draw benefits is rising to 55.

Secondly, as your husband's pension is in payment you will not able to take any tax free cash only an ongoing pension income.

The chances of getting an external transfer sorted between now and 5 April (in my experience) are low. However, you have stated that you need cash now, which the pension will not be able to meet.

However, it is important to balance your needs now against future needs. For example, you probably need cash now to purchase a house but in the future what will you live on in terms of income?

A thorough understanding of options with regard to the pensions and other assets of the marriage will enable you to prioritise your needs / goals. This is step one.

Ensuring that the true value of the assets is factored in is an important second step.

Negotiations come next.

I hope this has answered your queries. If you need more, please post again.

Phil


Please note: Although I am a Resolution Accredited Independent Financial Adviser my comments are given here as general guidance ­­­­­­­­­­­­­base­­­­­­­­­­­­­d on the (often limited) information available and does not constitute financial advice. They should not be seen as a substitute for detailed financial and legal advice.

I need to find out the following please ...

If I had a hypothectical £150k pension....

If I take pension now then how much would it be?

If I defer until 60 yrs then how much.

Or, would I have to wait until 65 yrs?

I do appreciate you may not be able to help but how can I find out please?

Thank you

Hi,

Without knowing what options you have from the existing scheme I can only tell you what the open market of insurance companies would give a 51 year old via an annuity for handing over £150,000.

This assumes that you take an external transfer as your pension share and immediately buy an annuity. There are other options (internally and externally).

Based on a female life aged 51 and in good health and a non smoker the annuity based on £150,000 would be approx £8,038 per annum (before tax) about 5.35% per annum yield.

Based on current rates a 60 year would receive about 5.9% or £8,900 per annum before tax.

This assume for a very basic annuity with no increase in payment.

The pension on offer from the existing scheme may be better. In addition, under the terms of the existing scheme you may be restricted from taking early (by the trustees) and so as you state you may not be able to draw until age 65.

If you can provide further information on the existing scheme I will be able to guide you further. A thorough review of your options and circumstances would enable me to advise you on the most appropriate action given your goals and objectives.

Regards

Phil


Please note: Although I am a Resolution Accredited Independent Financial Adviser my comments are given here as general guidance ­­­­­­­­­­­­­­base­­­­­­­­­­­­­­d on the (often limited) information available and does not constitute financial advice. They should not be seen as a substitute for detailed financial and legal advice.