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DEAR TRICIA.

Byline: Edited by TRICIA PHILLIPS Get in touch! money@mirror.co.uk

Q I have a simple question. Can I cash in my civil service pension?

A If you have contributed into the defined benefit scheme then the simple answer is no. This also includes the Principal Civil Service Pension Scheme and alpha.

However, if you have contributed into the defined contribution schemes which include the Civil Service AVC Scheme, Partnership or their Stakeholder then yes, you will be able to.

Q I have two annuities and believe if I was to die my annuity providers would keep all the money left over. Is this true and what can I do to stop this?

A When you purchase an annuity you are exchanging your pension fund for a guaranteed income for life for you and possibly your spouse or dependent if you took out a joint life annuity. In April 2017, when the second-hand annuity market is launched, you could possibly sell your annuity in exchange for a lump sum. But the amount you get will depend on your age, health and income received. You would lose that income and would pay income tax on the cash you receive.

Q I already have an annuity. Can I take 25% out of my pension pot tax free and leave the rest so I get a reduced pension each month?

A You cannot take 25% tax-free cash from your annuity already in force. If you have other pension funds that you haven't taken any benefits from you can take 25% tax free.

Q I'm able to access my private pensions in June and want to pay off my mortgage. I am going to continue to work and I don't want to get hit by income tax after taking my tax free lump sums. Could I take my pensions in stages to minimise the tax and can I transfer anything to my wife who is a non-tax payer?

A Yes you could take the remaining fund in stages via flexi-access drawdown to reduce potential tax. Tax will be due at your marginal rate, however it is likely to be initially taxed at emergency rate and you will have to reclaim any tax overpaid. You may be able to share PS1,060 of your tax allowance via the Marriage Allowance.

Q I have a pension and have taken the tax free lump sum. Can I now take the remainder as another lump sum?

A That depends on whether you bought an annuity with the remaining fund. If you did then you can't do anything until April 2017. However, if your remaining fund is either in drawdown or uncrystallised (you haven't taken from it), then you can. I strongly suggest you take professional advice before proceeding.

Thanks to our independent financial advisers - The Money Map (0800 848 8250) and PMI's John Stewart (0800 018 3751). For independent advice send an SAE to Your Money Independent Advice Bureau, Daily Mirror, One Canada Square, Canary Wharf, London, E14 5AP. Please give your age, income, family circumstances and details of financial products you want advice on, along with your phone number.

Or email money@mirror.co.uk marked "advice"

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Publication:The Mirror (London, England)
Date:Jan 27, 2016
Words:531
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