Yet Another Cycling Forum
General Category => The Knowledge => OT Knowledge => Topic started by: Nutbeem on 28 March, 2019, 06:16:14 pm
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12 Months ago I retired and then returned to part time work.
I've just been auto-enrolled in the NEST pension scheme.
My monthly contribution is small and easily affordable. It looks like my employer will match the contribution & it gets tax relief, so presumably will give a better return than putting the money in savings & certainly better than spending it on coffee and cake.
What I'm unsure about is what happens when I fully retire, which may be only 4 years away. At that point I estimate the fund will be worth a massive £2500. My research says it has to be used to buy an annuity, but I'm pretty sure no one will provide an annuity for such a small amount & if they did it would return loose change. In which case what happens?
In case it isn't obvious I'm not expecting to live of income from the NEST, I already have a pension and some savings.
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You can probably just take it as a lump sum
https://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum
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You can probably just take it as a lump sum
https://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum
Thanks, that looks like the answer I needed. Didn't find it on my Google search.
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Just be aware that only 25% will be free from tax - the balance £1,875 amount will be added to your taxable income including any other pensions already in payment, so that the total of that would be taxed if it exceeds your personal allowance.