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Thank you!
I have a chunk in one pension which I paid into from 2001 to 2014. That's stuck where it is unless I end up working somewhere which will allow the amount to be transferred into the new pension.
Then I have the pension I am currently paying into since 2014.
I'm 45 next year.
The point is that by the time it gets into your grubby hands you have paid tax on it at least once
Eurgh, isn't that so...
Ben689908-
Eurgh, isn't that so...
Well, it helps to pay for society, etc.
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I have a chunk in one pension which I paid into from 2001 to 2014. That's stuck where it is unless I end up working somewhere which will allow the amount to be transferred into the new pension.
I had 4 pensions (despite only having two jobs that gave me a pension):
- company 1 before I moved to the US (A)
- company 1 after I moved back from the US (B)
- company 1 after acquisition (C)
- company 2 (D)
Pension C is the largest, and was only charging 0.19% each year (even though I'm not paying into it any more) so I left it alone.
Pensions A and B were charging >0.5% each year so I transferred the contents into my current employer's pension (D) which just happens to be the same provider as pension A. Pensions generally have lower rates if you're actively paying into them too.
Pensions A, B and C were all long before the NMPA changes in 2021 so all should have allowed me to take them from 55 but the rates and amounts of A and B were such that it made more sense to roll them into the current one (D), so that will be 57 before I can touch that.
The point I'm labouring is that moving an old pension to something new may mean you can't collect it from 55 any more, as it would default to the new pension setup of 57. But you'd need someone qualified to be able to make sure as every pension/situation is different.
Leaving C alone means I'll be able to take 25% of it at 55 if I wanted to. I'd hope to have my mortgage paid off and to be retired before 55 (I'm 48 now) so I'm going to need to be in a position where I have savings/income before I'm able to get anything at 55. It's then a long wait (12 years at least, probably more) until I'd be able to collect any state pension.
- company 1 before I moved to the US (A)
Greenbank
Yes, when you get your pension it's treated as income and income tax is due as expected.
The age 55 or 57 thing will depend on your age, when you took your pension, etc. As long as I keep one of my old employer pensions I'll be able to take that from 55. My more recent employer pensions will all be from 57 (as the age changes to 57 from 6th April 2028 and I won't be 55 before then). If I moved my oldest employer pension into a new pension I may lose the ability to get it at 55. Google NMPA for more info on all of this.
As a generalisation: when saving you either:
a) Put money from your pre-tax salary into something like a pension and it is taxed on the way out.
b) Put money from your post-tax salary into something like an ISA and the results of that are tax free.
The point is that by the time it gets into your grubby hands you have paid tax on it at least once.