Pension Ok To Cash?

[shortpaul]

I started a Govt. 'Stakeholder Pension' thru Scottish Widows (SW) in Oct 2015. I left the company with whom the pension was initiated in 2017 and it has not been contributed to since that date. Today I received a summary from SW saying the pension had a value of c.£450. Clearly there is no value to me in continuing to view the pension value as a possible viable pension for the future. I am 63 yrs old. Therefore:-

1. Am I right in saying that I can convert the pension to an immediate cash payment ?
2. Assuming this is correct, could someone give mea rough indication how much of the
current value I might lose if I did ?

Any guidance would be much appreciated.

[Peter Pedant]

very bad idea
there is quite a lot here
https://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum

the short answer is - ring and ask
which you are going to have to do anyway

[and yes I have a stakeholder and I havent cashed it]

[ubasses]

https://www.thisismoney.co.uk/money/pensions/article-3148650/What-pension-provider-charge-access-cash.html

This link advises that SW are one of the Companies that will allow charge free access. As long as you meet the rules re the sum of all pensions added together in Peters post, you need to phone the Co. and ask for an up to date valuation (when statements arrive they the balance is usually for the end of the previous month/quarter). There will have also been some movement in the market, they will then advise you how to proceed. Another alternative would to transfer it into your current pension scheme.

[Peter Pedant]

hi ubasses
thanks for the detailed answer

in general as far as I can see - anyone fiddling with ma pension is gonna demand 30% fee
and there is the little problem of tax

because he didnt pay tax going in, he is going to be charged tax going out - innit
that is lump sum zero and the whole lot is income.

I dont know - all I know is that cashing is a really really bad idea

[davebro]

If £450 is the capital sum then the annual pension would be minimal & hardly worth the bother. I would cash in (if allowable).

[ubasses]

As I understand it 25% is tax free, and tax will be charged at shortpaul's marginal rate on 75%. As tax relief was added to the fund, and if it has performed well he should still get out more than he paid in. Confirmation of the 'free of charge' in my link needs to be checked with them.
As Davebro says, in the scheme of things it hardly worth leaving.