Early pension drawndown

Hi all, looking for some clarity on what I can and cannot do with my pensions.

M Age 54 currently employed on higher tax rate. Same employer almost 30 yrs.

20+ yrs in DB pension now closed a few yrs. Value 22k at NRA 65 but can avail of same at 60 without any reduction. DB pension indexation capped @4% yearly with CPI.
Scheme allows for approx 50% spousal pension should I die prior to my spouse.

I have also a current DC pension with the same employer with a current fund value of 90k.
Total yearly contributions avg out 15k

I'd like to end my employment @55yrs or soon after, having taken a DB transfer (DB scheme rules permit it) into my DC pen.

I have recently requested a transfer value but have not had a reply to date.

I understand 55 is not the optimum time nor are transfer values currently favourable (from reading through this forum).

I am in good health and have no intention of seeking further employment.
I have further means of income.

So my question is:

How can I maximise my cash take?
I have no interest in a yearly pension etc.
I understand I can take 25% of my total DC fund as cash.
Can I take everything after that in cash and pay tax at the various thresholds?

Apologies, bit of a long brief and a slightly raw attitude to pensions in general (I'm a cash is king / bricks & mortar kind of character) but I appreciate any information you folk can send my way.

JP

Is there any reason you want a transfer value from the DB scheme?

Regarding the tax free lump sum, you should be able to take 25% of the cash equivalent of the DB scheme from the DC scheme.

Fortune said:

Is there any reason you want a transfer value from the DB scheme?

Regarding the tax free lump sum, you should be able to take 25% of the cash equivalent of the DB scheme from the DC scheme.

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I want to maximise my cash take and would prefer everything in cash if that's possible even it involves payment of tax in the process.

I'm assuming (I maybe wrong) that I'd have to transfer DB to DC to if I want to access both funds for full encashment, if even possible?

As i mentioned, I do not have a requirement for yearly pension.

Loot2Boot said:

I want to maximise my cash take and would prefer everything in cash if that's possible even it involves payment of tax in the process.

I'm assuming (I maybe wrong) that I'd have to transfer DB to DC to if I want to access both funds for full encashment, if even possible?

As i mentioned, I do not have a requirement for yearly pension.

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I don’t work in financial services.

My understanding is that all benefits attached to the same employment must be taken at the same time.
So, yes, you may need to transfer out of the frozen DB to retire before 60.
DB transfer values don’t seem to be great at the moment.

If the rules of the frozen DB scheme only allow for earliest retirement from the scheme at 60, you wouldn’t be able to take your DC benefits until then if remaining in the DB scheme.

You may need to have approval from your employer and trustee to retire and draw upon your DC early.

Thanks Deauville.

Yep, I'm getting the vibe I can only attain 25% max cash of a DC fund when I draw down.

I'm not a fan of the DB promise and the sooner I can get my fund out, the better!

Thought I'd be in the clear to transfer DB into DC and subsequently just finish with my employer and take my 25% cash and ARF.
What I'd never factored in was the need for permission from my employer to then take my DC pension before 60 if DB had been transferred to DC.

Basically this is a play to finish working, I've done it since 17 and reached the point in my life where I've other things I'd much prefer to do with my time now.

Appreciate the feedback.

Loot2Boot said:

Thanks Deauville.

Yep, I'm getting the vibe I can only attain 25% max cash of a DC fund when I draw down.

I'm not a fan of the DB promise and the sooner I can get my fund out, the better!

Thought I'd be in the clear to transfer DB into DC and subsequently just finish with my employer and take my 25% cash and ARF.
What I'd never factored in was the need for permission from my employer to then take my DC pension before 60 if DB had been transferred to DC.

Basically this is a play to finish working, I've done it since 17 and reached the point in my life where I've other things I'd much prefer to do with my time now.

Appreciate the feedback.

Click to expand...

I would have thought the request for permission would only be a formality.
Even transferring DB value to DC scheme would require an ‘willing and able to accept’ letter sent from the DC administrator to the DB administrator. Fairly standard practice.

Usually start with a transfer value statement request to your DB administrator.
After that you receive the TV statement with paperwork to apply for transfer if you then decide to proceed.
It’s one step at a time.

Check first if it’s okay to retire early and access benefits from DC.

I’m sure there will be far more informed informed contributors here who will be able to confirm the above if correct.

Again, I’m far from being an expert.

Edit. Oooops. Just re-read your OP and see you have already applied for a transfer value statement.