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House Of Fraser Pension
25 Answers
I have received a letter from house of fraser to say I have a pension with them I only payed in £460 the whole time I was there they are now saying I could take a lump sum of£16'000 should this be right I feel as though it is a scam HELP PLEASE
Answers
I would agree with what factor-
07:41 Sun 15th Sep 2013
Someone here also got a letter
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Sounds very odd to me
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Sounds very odd to me
But if you were in the scheme and the letter does come from the trustees it could be genuine. Do they give any details such as years of membership, employer, amounts paid in? Maybe the employer paid in a huge amount.
I think you may have misread it -the £16000 figure is a general figure for taking 'trivial' pension values as cash lump sums if your total of all schemes is below that and you meet age criteria. This may not mean yours is worth that much
I think you may have misread it -the £16000 figure is a general figure for taking 'trivial' pension values as cash lump sums if your total of all schemes is below that and you meet age criteria. This may not mean yours is worth that much
Thanks.
I don't see how you can take it then.
This is from the HMRC website:
If all your pension savings in all the pension schemes you belong to are worth no more than £18,000 you may be able to take all your pension pots as a lump sum. You can do this even if one or more of your pension pots is worth more than £2,000 or if you've already started to take one of your pensions.
This type of lump sum is called a 'trivial commutation' or 'trivial' lump sum. To be paid this type of lump sum you must:
take all the savings in all of your pension pots within the same pension scheme as a lump sum
have your pension savings in all your pension schemes valued on the same date which must be no more than three months before you take your first trivial commutation lump sum
If you belong to more than one pension scheme you don't have to take a lump sum from all your schemes. For example, if you're a member of two pension schemes you can take a trivial lump sum from one scheme and a pension from the other scheme.
If you are taking a trivial lump sum from more than one of your pension schemes you must take all the trivial lump sums within 12 months of the first lump sum payment.
Valuing your total pension pots
The rules for valuing your pension pots depends on:
whether or not your pension has started to be paid
when your pension started
the type of pension scheme you belong to
The valuation that you get for a trivial commutation lump sum payment will often be different to the valuation for taking a pension.
Valuing your pension pot before your pension has started
The value of pension savings held under a money purchase or cash balance arrangement is the value of savings held in your pension pot. Your pension scheme administrator can tell you how much your pension pot is worth.
The value of your pension pot in a defined benefits arrangement is your promised pension multiplied by 20. If your pension scheme gives you a lump sum without having to give up ('commute') your pension you also need to add on the value of this separate lump sum.
For example if you've built up a pension of £500 a year and your scheme also gives you a lump sum of your pension multiplied by 3, your lump sum will be £1,500. Your pension pot is valued as £11,500.
(£500 x 20) + £1,500 = £11,500.
I don't see how you can take it then.
This is from the HMRC website:
If all your pension savings in all the pension schemes you belong to are worth no more than £18,000 you may be able to take all your pension pots as a lump sum. You can do this even if one or more of your pension pots is worth more than £2,000 or if you've already started to take one of your pensions.
This type of lump sum is called a 'trivial commutation' or 'trivial' lump sum. To be paid this type of lump sum you must:
take all the savings in all of your pension pots within the same pension scheme as a lump sum
have your pension savings in all your pension schemes valued on the same date which must be no more than three months before you take your first trivial commutation lump sum
If you belong to more than one pension scheme you don't have to take a lump sum from all your schemes. For example, if you're a member of two pension schemes you can take a trivial lump sum from one scheme and a pension from the other scheme.
If you are taking a trivial lump sum from more than one of your pension schemes you must take all the trivial lump sums within 12 months of the first lump sum payment.
Valuing your total pension pots
The rules for valuing your pension pots depends on:
whether or not your pension has started to be paid
when your pension started
the type of pension scheme you belong to
The valuation that you get for a trivial commutation lump sum payment will often be different to the valuation for taking a pension.
Valuing your pension pot before your pension has started
The value of pension savings held under a money purchase or cash balance arrangement is the value of savings held in your pension pot. Your pension scheme administrator can tell you how much your pension pot is worth.
The value of your pension pot in a defined benefits arrangement is your promised pension multiplied by 20. If your pension scheme gives you a lump sum without having to give up ('commute') your pension you also need to add on the value of this separate lump sum.
For example if you've built up a pension of £500 a year and your scheme also gives you a lump sum of your pension multiplied by 3, your lump sum will be £1,500. Your pension pot is valued as £11,500.
(£500 x 20) + £1,500 = £11,500.
As you are under 55 the excerpt from Inland Revenue web site below will be of interest to you. I believe the tax is circa 50%.
Things to remember about accessing your pension pot early
Before you decide to take some or all of your pension early, remember:
pension savings are intended to provide for your retirement so there are rules as to when you can take money out of a pension scheme before you're 55
if you transfer and take some or all of your pension savings early there will be a substantial tax charge to pay and it will be charged on money you get and any fees paid
you will pay the tax not the company and it isn't covered by the fees
loans are not a loophole or a way round the tax charges
any money you have left in your pension scheme may be at risk
Top
HMRC are tough on pension liberation activity
HMRC works extremely closely with partner agencies and other regulatory bodies to detect, disrupt and deter pension liberation activity. Action in this area has taken many forms and we have an active compliance team and programme.
Also as you are so close to the limit for all pensions pots added together you need to check that they do not all come to more than £18,000 which is the maximum permittable, to take any as a lump sum.
Things to remember about accessing your pension pot early
Before you decide to take some or all of your pension early, remember:
pension savings are intended to provide for your retirement so there are rules as to when you can take money out of a pension scheme before you're 55
if you transfer and take some or all of your pension savings early there will be a substantial tax charge to pay and it will be charged on money you get and any fees paid
you will pay the tax not the company and it isn't covered by the fees
loans are not a loophole or a way round the tax charges
any money you have left in your pension scheme may be at risk
Top
HMRC are tough on pension liberation activity
HMRC works extremely closely with partner agencies and other regulatory bodies to detect, disrupt and deter pension liberation activity. Action in this area has taken many forms and we have an active compliance team and programme.
Also as you are so close to the limit for all pensions pots added together you need to check that they do not all come to more than £18,000 which is the maximum permittable, to take any as a lump sum.
