# Pension Fund worth 68,000



## lorraine1 (18 Oct 2012)

Hi, Just wondering if anyone could help. I have a directors pension which i contributed to between 2006 and 2009, then i had to retire due to ill health at the age of 41. i am permanently disabled and will not be able to work again. The fund is worth about 68,000.00 not a lot for a pension fund i know but can i draw it down as a lump sum as my family are really struggling at the moment. if anyone has any advice it would be greatly appreciated the pension is with Bank Of Ireland


----------



## Crow Paddy (19 Oct 2012)

Sorry, I'm only replying because nobody else has, as I am not an expert. Hence, take this with a pinch of salt. But, in my unqualified opinion, you should be entitled to 25% tax-free as a lump sum. But you would be required to either buy an annuity with the rest, or lock it into some kind of fund until such time as other options become available. Hopefully, someone more knowledgable will reply too.  And I'd add, that this is clearly a hot political issue, or if it isn't then it should be. People in this situation should write to their TDs to let them know about it.


----------



## LDFerguson (20 Oct 2012)

lorraine1 said:


> Hi, Just wondering if anyone could help. I have a directors pension which i contributed to between 2006 and 2009, then i had to retire due to ill health at the age of 41. i am permanently disabled and will not be able to work again. The fund is worth about 68,000.00 not a lot for a pension fund i know but can i draw it down as a lump sum as my family are really struggling at the moment. if anyone has any advice it would be greatly appreciated the pension is with Bank Of Ireland


 
Hi Lorraine, 

Notify Bank of Ireland about your health issues and tell them that you want to take early retirement due to ill-health.  If you meet the criterion "permanently incapable through infirmity of mind or body of carrying on your own occupation or any occupation of a similar nature for which you are trained or fitted", then you should be permitted to retire early.  Bank of Ireland will probably ask to see medical reports backing this up. 

While you're at it, ask Bank of Ireland to calculate your maximum tax-free lump sum based on your salary when you were working and the number of years you were working in your company.  If greater, you can choose to withdraw 25% of the fund as a tax-free lump sum instead.  

Unfortunately you won't be able to withdraw the whole fund as a lump sum - once you have withdrawn the amount above, the balance must be used to either buy you an annuity, i.e. a fixed pension for life. While in your 40s, the annuity rates will be very low.  Otherwise, if you take the 25% lump sum, you can also defer buying the annuity wih the balance by re-investing it in an Approved Minimum Retirement Fund (AMRF).  You cannot access the fund in an AMRF until you're 75 or have €18,000 per year guaranteed minimum lifetime income from other sources, but you can convert your AMRF into an annuity at any stage.


----------



## Blondbiddy (25 Jan 2013)

*I am retiring in ireland and have a private uk*

I worked in the UK for 20 years and have been living in Ireland for the past 20 years. I don't work in Ireland and have never paid any contributions. I am due to get a retirement pension in a few months (as I will be 60) from a bank I worked for in the UK. They have offered me an annual sum of about £8,000 or a lump sum of £40,000 plus £5,500. Which should I take and should I leave it in a UK bank or is it taxable if I transfer it to an Irish bank? I also have 60% UK state pension when I am 63. 
Can anyone advise me please?


----------



## Dave Vanian (25 Jan 2013)

You're giving up £2,500 per year for life (plus increases?) in return for £40,000 now.  Unless your pension is likely to be taxed heavily or you have a good use for the £40,000 now (e.g. paying down expensive debt) I think I'd take the extra pension, assuming you're in good health.  

Assuming you're living in Ireland, the lump sum would be tax-free and the pension would be assessable for tax.  But if you've no other income you might not have to pay any tax.  

Whether you keep the money in a UK bank or an Irish bank is irrelevant to whether or not it's taxable.


----------

