Cashing in pension?

SweetP1

I stopped paying into a pension about 7 years ago as l started paying into AVCs. I won't be paying into this pension again so am wondering can I cash it in now or do I have to wait until 60 to get it at which point it will be worth practically nothing! TIA

coylemj

SweetP1 wrote: »

I stopped paying into a pension about 7 years ago as l started paying into AVCs.

That doesn't sound right, you can normally only pay money into an AVC in parallel with your contributions to an occupational pension.

Was your employer paying contributions even though you stopped paying and redirected your money into the AVC?

SweetP1 wrote: »

I won't be paying into this pension again so am wondering can I cash it in now or do I have to wait until 60 to get it at which point it will be worth practically nothing! TIA

Why do you think it will be worth nothing? Is the money not invested by the trustees?

SweetP1

Thanks for your reply. I'm a teacher and paid AVCs for the first two years. I then moved to a private school and didn't pay into the AVCs and the school didn't pay into a pension for me so I set up my own. When I started paying into AVCs again I was told I couldn't pay into two pension so stopped putting money into the private one. Hope that makes sense! There's not much in it so that's why I don't think it'll be worth much when I retire.

coylemj

If you're in a job which has no pension scheme and you're paying money into a pension of your own, that is not an AVC, it's usually called a PRSA. An AVC can only exist in parallel with an occupational pension scheme such as when you were in the public sector.

The reason I'm making the distinction is because it's now possible to cash in up to 30% of any money you have an an AVC, you will have to pay your marginal (top) rate of PAYE and USC on any withdrawal so you'll need to consider if you really want to so this.

SweetP1

Can't cash in any of my AVCs as will be paying into them for the next 20 plus years. So I just have to leave the other pension as it is? Sorry, I'm hopeless when it comes to things like this!

SBarrett

It sounds as if you started a personal pension and when your school started a plan for you, stopped and made AVC's by way of personal contributions.

You must wait until you are 60 to cash in your personal pension. How much it is worth depends on how much you put in and how performs. If you are in cash, it will lose it's real value. In other asset classes, a better chance of doing well. 7

That pension alone may not be worth a massive amount at 60 but you have to look at all your pension funds together at that time. Hopefully the other fund you now have will be your main fund.

Steven

SweetP1

Thanks Steven!