Quizzes & Puzzles40 mins ago
Pension Advice Please
28 Answers
Finished a short-term contract with the DWP. They are happy to refund my pension contributions of £253. They won't give me the £1,800 that the DWP paid in employers' pension contributions. Are they in the right?
Answers
If you elect to take the money (£253) you will miss out on the £1,800 paid to your personal pension pot by the DWP – which at the age of 55 you would be able to take 25% tax free (£513) and the rest at your normal tax rate. This is a very good return on investment for your £253. The only down side to not taking the money now, is that there will be an annual administrati
22:03 Thu 07th Jan 2021
This posting has got me thinking, how did Paigntonian know that he could claim his pension contributions back?
If the DWP advised him of this option, they were being very disingenuous in not advising him of other (better) options.
Imagine they had said – you can have your £253 contribution back, or alternatively you can have 25% of the pension value tax free (£513) and a pension for life – which would you like?
I would be very interested to know if the DWP dangled the carrot of the contributions refund without mentioning other options.
If the DWP advised him of this option, they were being very disingenuous in not advising him of other (better) options.
Imagine they had said – you can have your £253 contribution back, or alternatively you can have 25% of the pension value tax free (£513) and a pension for life – which would you like?
I would be very interested to know if the DWP dangled the carrot of the contributions refund without mentioning other options.
Hymie, if its the old fashioned average/final salary defined benefit schem then yes its up to the employer as its there scheme to set out the options. But if its anything else in my experience employers take a hands off approach for money purchase direct contribution schemes and the more recent workplace pensions with NEST etc. Employers leave it to the employee /leaver to sort it with the pension provider.
Good luck Paingtonan. We dont know the details of that DWP scheem but we agree you need to find out all the options and we think its likely that the worst option is to ask for your £253 back. Let us know how you get on??
Good luck Paingtonan. We dont know the details of that DWP scheem but we agree you need to find out all the options and we think its likely that the worst option is to ask for your £253 back. Let us know how you get on??
I would still like to know how Paigntonian found out that he could claim his pension contributions back.
If he were to take this option, the big winner would be the DWP who would get their £1,800 pension contribution back (either from their own scheme, or from the third party pension provider).
While the DWP is not required to advise Paigntonian of all his pension options available from the scheme, and they certainly cannot give financial advice in relation to the pension – but to make an offer of the worst option available to persons who have paid into the DWP pension scheme is clearly not in the interest of their staff.
If he were to take this option, the big winner would be the DWP who would get their £1,800 pension contribution back (either from their own scheme, or from the third party pension provider).
While the DWP is not required to advise Paigntonian of all his pension options available from the scheme, and they certainly cannot give financial advice in relation to the pension – but to make an offer of the worst option available to persons who have paid into the DWP pension scheme is clearly not in the interest of their staff.
