Cashing in small pension pot

[anotherdebt]

Hi all

I have just turned 55 and desperately need a new car. It turns out I have a small pension fund of around £4000 which I was going to cash in. However I still have some debts (that I am paying at a nominal amount for the last 5 years) As the pension is with Lloyd’s and so is the debt is there a likelihood of them taking the money if I cash it in?? I am aware that they can but wondered if they would be likely to after all this time as it is probably ‘written off’ by the bank. Has anyone else been in this position please??

[honeybee13]

Abbey Life are owned by Phoenix now.

https://citywire.co.uk/new-model-adviser/news/phoenix-group-acquires-abbey-life-for-935m/a953337

HB

[Mr.P]

2 hours ago, anotherdebt said:

I have just turned 55 and desperately need a new car. It turns out I have a small pension fund of around £4000 which I was going to cash in.

If this is a defined benefit scheme, you should take some professional advice before cashing it in. Also be aware that you may well have to pay income tax on the amount you take out of the pot.

[ericsbrother]

now cashing in a small pension pot is normally straightforward, you get the first 25% tax free and ay your usual rate of tax on the rest so timing the cashing in is necessary if your income is borderline to the higher tax threshold.

If you have no other pension provision then the pension provider can refuse to hand over the money without assessing your financial position but as it is such a small amount it will likely be below the trigger threshold for this. Usually it is around £15k but can be higher if you are alrady of retirement age or have other pensions

Pensions are stand alone so LLoyds cant grab the money to furnish the debt.