Pension Drawdown

Discussion in 'Finance & Pensions' started by sonofdon, Jan 23, 2012.

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  1. Hi Folks,

    Has anyone any experience/advise regarding drawing down on your pension whilst still serving?

    Your comments would be most appreciated.

    Thanks in advance
  2. As I'm a financial nugget, can you explain that one a bit more?
  3. haha,

    basically taking part of your pension now (in a lump sum) instead of at maturity, when you leave/pension age.

    Usually 20% I think, and tax free.
  4. Never heard of that one before, does the mob sanction it as you may bang your notice in as soon as you get it. One for the UPO staff (Stix maybe?)
  5. Thanks guys,

    Only heard of it as the missus is a solicitor and it is often done in divorce cases.

    WreckerL, doesn't matter about notice as its calculated on time done at the drawdown point.

    Can easily see how this would be kept under the wire though as I don't think it is financially appropriate for the MOD!

    Will contact the pension dept at SPVA and let you know the outcome.

  6. Never heard of that either and I used to be a financial consultant!! ( a wee while ago.) I'd talk to your FC rather than your mrs, no disrespect intended but would you go to your financial consultant to discuss divorce? Pension advisors know their trade intimately and also know the current state of pension rights and will be aware of future plans and be in a position to advice correctly.
  7. I can confirm that neither AFPS 75 nor AFPS 05 contain a rule permitting this. Indeed, readers are more than a little aware that, if you leave with an immediate pension and re-join the regulars or FTRS, your pension is abated to prevent you receiving more in pay and pension than you did on your last day of regular service (with an inflation uplift). If the MOD changed the rules to allow pension to be drawn in service they would have difficultly defending abatement.
  8. Ask a divorced matelot if they've heard of it! (I bet I know the answer) SPVA have probably got better things to do than waste their time on this.
  9. As you have no entitlement to a "pension" prior to the actual completion of the required service (obviously dependent on which scheme, etc) I don't see anyway to get paid it early. As stated above you may never be entitled due to leaving, death, med discharge, etc. In the dim and distant past when I dealt with sort of thing it was definitely not allowed.

  10. Thanks for all your input.

    Official line is you can only value your pension for transfer or divorce purposes. Therefore a long way round is to transfer your pension, when you leave, to a civvy company and then do income drawdown.

    notafourknotfudgepacker: If everyone's attitude was the same as yours the World would be in an even worse off state. If asking SPVA questions about pensions is a waste of their time, I am fairly sure they would not waste money on a helpline.
  11. Sonofdon

    i am now a compliance consultant who spends his days assessing the financial advice provided by Independant Financial Advisers,. I have been doing this since 1997. I have seen it all both the good, the bad and the downright plain ugly

    anyone thinking of transfering their final salary pension scheme into a Personal Pension needs to be sectioned - full stop - if you want further rationale for this then just ask but plain and simple DO NOT TRANSFER OUT OF A FINAL SALARY PENSION SCHEME

    The marketing frenzy surrounding drawdown is simply playing upon creating a 'need' for PCLS which is tax free and upto 25% and can be more in some circumstances (PCLS = Pension Commencement Lump Sun). a need to buy a car/holiday/house extension or something but the need is created because the people arranging this transaction earn money in doing so. Drawdown is not relevant for final salary occupational schemes and applies to personal pensions/simialr which are the preserve (on the main) of the private sector. If you are currently serving then Drawdown is not for you

    there are some serious tax implications to consider when 'crystallising' your pension. Crystallisation is what happens when you take the PCLS and or Income. For example pre crystalisation if you die the 'whole' fund goes to your nominated beneficiary. post crystallisation the fund is taxed at 55% then goes to your nominated beneficiary. there is loads of other stuff to consider too - none of this is bad per se,it just needs to be considered and applied to your own personal circumstances

    If you are a civvy and have a Personal Pension and are considering drawdown then please please please seek advice from an Independent Financial Adviser. Google 'unbiased advice' for an Independent Financial Adviser who lives near you.

    i hope the above helps in a small way - feel free to ask for more if you can take it or suffer from insomnia!
    Last edited: Jan 28, 2012
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  12. Asking SPVA sensible questions about pensions if a valuable use of their helpline - your completely bone question is not:-D

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