Selling A U.K. Pension

[Carlosm]

Came out here over a decade ago with 5 mates. 3 are now dead due to accidents and a heart attack, all in their 40's. So i've decided to cash in my pension whilst i can still enjoy the benefits as my financial future is fairly secure. This though is way easier said than done. I've a couple of U.S. friends who had no problems 'selling' theirs as in the USA a pension is classed as your money and you can have it any time you want. In the U.K. there's little chance of getting it until your at least 55yrs old if not even older.

So, does anyone have any advise on how to get my hands on it at 49 years old ?

[Dancealot]

Very very bold question.

Ramble the highly secured gates and you will see what.. behind, awaits. Let me just say IF you built up pension money in your life you will be allowed a monthly payage from the day you will retire untill the day you die or your spouse. I don't think you have any say about what will happen to that money before you will retire. I could be wrong.

But still very interesting question.

Cheers!

[losworld]

How did your mates in the US sell their pensions? I have never heard of this.

[jocko]

How did your mates in the US sell their pensions? I have never heard of this.

My feeling is you wont get value for your money maybe you will live a long time to enjoy your pension it's a gamble .

[GeorgeO]

It's known as "cashing in" a pension, and is generally only available to private pensions.

In all cases, you have to be of an age where you are already receiving payments, which can be anything from 55 onwards. You will not be able to "cash in" a pension which is not yet being paid.

[AyG]

Generally speaking, you can't cash in a pension. The best you can do is under the "Triviality" rules. If the value of the pension is less than GBP 18,000 and you are 60 or older, you can exchange the pension for a lump sum.

Otherwise, you can wait until you're 56 and then take a 25% lump sum. The rest has to stay in the pension. (If you transfer to a QROPS, some jurisdictions will let you take 30%.)

There used to be QROPS schemes where you could cash in the whole thing, but this was very much frowned upon by HMRC. You face being hit by an enormous tax bill should you try it.

[PattayaPhom]

QROPS.............depending on the fund value....other than that its wait till 55.........truley screwed as it was only 50 till 2 years ago and has really messed up my plans.

[gk10002000]

"Cashing in a Pension" is a little bit imprecise. What you are really doing is, giving your annual or monthly payments to another person or agency. In return, they give you a lump sum of money. This is quite common in many places. You often see people that have structured settlements or pensions do this. They don't want $1,000 a month or whatever the regular payments are for the next 20 years. They want the cash now. So they go to companies or individuals and they sign over their payments, and in return they get lump sum cash.

I knew one Air Force person who that did that when he was "Riffed". Some people could get $54,000 lump sum, or depending on your time in and rank, you could get money every month for the next 18 years. My associate happened to be an accountant and went out and got 74 cents to the dollar on his structured payout and got the cash up front. He signed over his payments.

A friend of mine currenlty has done a similar thing. He gets a insurance settlement annuity payment every 5 years of several hundred thousand dollars. However, usually he can't wait, so he "sells" those monies to somebody. The person gives him cash, and gets the insurance payments or part of it.

In the USA you often see late night infomercials about this. I am not aware of any laws that prohibit this. Of course I am sure there might be some "usery" rates types of laws and things like that. I have no idea if any licensing or regulating goes on. If you do this, run the numbers. You might not like how little of the total amount of money you may actually get. You could easily get half of what would have been paid out. But of course you get that money now.

[Pib]

I know the OP is talking selling a UK pension...here's a web site on selling U.S. pension which may give him some ideas/leads. Link

But my understanding of all these schemes is the pensioner ends up with significantly less than what the lifetime value of the pension is...it's almost like a long term loan.....plus there is usually insurance the pensioner must buy in case he kicks the bucket before inflows from his pension end up paying back the company buying his pension. And I have no doubt the fine print carries other protections for the company buying the pension.

[GuestHouse]

The OP is clearly clueless on what a Pension is and what it aims to provide.

Oh he's from the UK ....... he's going to blow it now and if he lives into old age he's going to drift back home and live on welfare.

[Nisa]

If you are able to do this, I assume it will involve your needing to get a life insurance policy naming the company buying out the policy as the beneficiary and/or other collateral. A pension is no like a legal settlement or lottery winnings that are owed regardless of your being alive or dead.

[AyG]

I overlooked the effect of the 2011 Finance Act. If your pension income from all sources is at least £20,000 you are now exempt from the maximum income drawdown ceiling. That means that you can, in fact, withdraw as much of your pension fund as you like (even 100%). However, such a withdrawal would be subject to income tax, so for most people this will be an unattractive option.

[Carlosm]

The OP is clearly clueless on what a Pension is and what it aims to provide.

Oh he's from the UK ....... he's going to blow it now and if he lives into old age he's going to drift back home and live on welfare.

BERK !