Should I withdraw and take a punt.....

rs500ff

Hey all,
I was recently made redundant but all ok as I had a new job lined up. I believe I can also withdraw the pension contributions that were made by the company over last couple of years (should receive confirmation about this today).

Just wondering what people’s opinions are?
I’m in my early thirties, no debts, no assets, no real financial pressure so far. I’ve no interest in pensions and would always prefer to have the money now and decide what I would like to do it.
However would it more prudent just to leave there until I reach retirement age?
I believe the amount is 12-14k.
I assume if it can be withdrawn I would be liable tax at the higher end too.
Just looking to weigh up the pros/cons. Cheers

HowFinancial

If you withdraw your funds (which you are only entitled to do if member of plan for less than 2 years), then you loose all of the tax relief on your contributions. You may also potentially loose employer contributions. You should shortly receive a "Leaving Service Options Statement" from your old employer. You can also request one from your HR dept. or your company pension provider. This statement will give a nominal value for your retirement fund.
Simplest thing to do is ring your provider & ask what you would receive in cash if you cash it in. Compare this to the value in the pension fund. Up to you to make decision from here.
In my experience, people generally prefer to either leave it where it is, or move the monies from company pension plan to a personal retirement bond.
If you decide not to cash it in I suggest shopping around a bit, and exploring investment options for this fund. Even if you are not accessing monies until retirement you have investment options for these monies, either within company pension plan or in a personal retirement bond.

rs500ff

Thank you very much for the reply. Much appreciated.

I’ve a reviewed some of the documentation and found that there is an Increased Exemption of €10k less the current value of the lump see receivable. If I decide to take this option I will not be permitted by the revenue to take a tax free lump sum at the retirement. Not sure if that applies only to a lump sum from this employer or is based on contributions from a future employer.

HowFinancial

Sounds like there is a termination package from your employer?
Depending on how your termination package is calculated you may be asked to "waive" the right to taking a Tax Free Lump Sum from the pension benefits from your current employer.
This is a personal decision, and usually boils down to: a) I want a few quid in my pocket now b) Am I getting more from the termination package if I waive the right to TFLS now than I would get at retirement? Best to review this with a Financial Advisor.
Waiving right to TFLS through termination package agreements only impacts on retirement benefits from current employer.
Regardless, you should speak to a Financial Advisor about how your remaining pension monies are to be invested.

rs500ff

Thanks again for the reply.
Unfortunately most of the paper work has been signed off now.
I have been informed that as i did not make any contributions outside of the payments made by my employer I am not entitled to withdraw this until retirement. Is this correct?

HowFinancial wrote: »

Sounds like there is a termination package from your employer?
Depending on how your termination package is calculated you may be asked to "waive" the right to taking a Tax Free Lump Sum from the pension benefits from your current employer.
This is a personal decision, and usually boils down to: a) I want a few quid in my pocket now b) Am I getting more from the termination package if I waive the right to TFLS now than I would get at retirement? Best to review this with a Financial Advisor.
Waiving right to TFLS through termination package agreements only impacts on retirement benefits from current employer.
Regardless, you should speak to a Financial Advisor about how your remaining pension monies are to be invested.