Got some questions?
We we’ve put together some FAQ that we’re often asked here at Pension Options Direct.
• Can I phase taking my pension fund to reduce my tax bill
You can and in many cases this is the better option if you want to access your whole pension fund. You can use a product such as a Fixed Term Annuity (Guaranteed Drawdown) or Flexi Drawdown to take some of your pension fund annually or monthly to take your pension in a tax free way. You can drawdown the whole of your fund this way.
• Can I take my tax free cash and not take any income.
Yes there are different ways of doing this through drawdown products including Fixed Term Annuities (Guaranteed Drawdown) and Flexi Drawdown
• If I have taken my pension as a lump sum in line with the new legislation and paid too much tax how can I claim the tax back?
HRMC have a specific form to complete called a P53. This can be completed online and sent direct to HRMC, alternatively we can help you complete the form and post it on for you.
• I have more than one fund can I consolidate them into one pension annuity?
Yes this is normally the best option and sometimes the larger the fund the better the rates you will receive. Just need to make sure that you are getting the best rates available and that you are not sacrificing a good guarantee with your pension.
FAQ – Pension Options Direct
• I have just received a pack of information from my pension company what should I do?
Take your pack to a pension specialist, they will check what you have and whether the offer can be bettered. Some such as ourselves will do this initial work without cost to you.
• I opted out of State Earnings Related Pension Scheme (SERPS or SP2) and I keep getting annual updates what should I do?
Once you reach the age of 55 you can if you wish access your pension. Until this point keep your most recent statements. Once you are over 55 and if you are interested in accessing your pension talk to a pension specialist.
• What is the regulation regarding small pension schemes?
If you are in a Defined Contribution Scheme you can access your pension after the age of 55 irrespective of the amount you have in your pension pot. If you take all your pension in one go you may end up paying a significant amount of tax. To look at ways to reduce your tax liability talk to a pension specialist company who may be able to help you find different ways of accessing your pension in a more tax efficient way.
• What is the life time allowance?
The lifetime allowance at present is £1,250,000
• Do I have to take an annuity with my current pension company?
No not normally in fact you are likely to have a better pension by using the open market. With some pensions there are built in guarantees which are valuable and in these cases you would be better off staying with your current provider. Ask a pension specialist company to review your pension benefits.
• At what age can I take my pension?
You can access your pension from the age of 55. You can if you wish take your tax free cash and keep the balance invested or you can take pension income as well as your tax free cash.
• How do I obtain the benefits of the open market?
The best way to obtain the full benefits is through a company such as ourselves who specialise in Pension Income products as some of the most competitive pension providers only deal through intermediaries.