Pension fund access for terminally ill

[Guest]

Does anyone know what the rules are to gain access to 25% of your pension fund tax free due to terminal illness, mnd.
The key question here is can I get access to this, but continue to pay into the pension fund until pensionable age or death.
I read somewhere that you can only draw if you no longer contribute. But my company continue to pay into pension fund while I am on long term sick leave.

[pete]

Hi mdwsamson,

Well due to MND I had little choice but retire, so when the company wrote to me ,the pension provider within our group also gave me three options , I don't know if all providers do the same, but they where extremely helpful , so wonder if you would better asking your for a figure ,as not sure any advice would be valid in your case . I can say I was shocked by how fast they sorted it all out and couldn't have asked for better treatment.

Regards
Pete

[Rainbow12]

My understanding is that the option to take the lump sum but then continue paying into your pension will depend on both the rules of the pension scheme you are in and the policy operated by your employer. A number of employers have set up their schemes to not allow you to start drawing your pension (or take the lump sum ) whilst continuing to pay in and accrue benefits. Saying that every plan is different so you will need to check with your employer/pension provider.

[mdwsamson]

Thanks for your advice, I will call the hr department

[Rory]

Remember all
If a MND sufferer is thinking about taking their pension , you might want to consider converting to an Impaired Life pension that gives you more income and benefit due to the shorter life expectancy . Your IFA should be able to help you with more info.

Rory

[Hazelnut]

I have a final salary pension that should pay out when I get to their retirement age in 2 years.

I applied for ill health retirement but they wanted confirmation that I would die within 12 months !!

They also were going to reduce the pension as I was taking it early !!

After a lot of phone calls and letters I decided to take early retirement which they agreed so am now waiting for the first payment and lump sum.

If any company can wriggle out of paying up front they will.


hazelnut

[pete]

Hi Hazelnut,

I faced a similar situation with my workplace, but at the time I had my diagnosis confirmed ,my speech was so poor ,I had little choice but to take early retirement as the medical profession was quick to inform me that my days in my future where less than I hoped ,my company was asking for redundancy volunteers ,so I took it and well it worked out fine after a few weeks I was sorted, still miss working a lot ,but the thought of me not getting my state pension is driving me to make damn certain I will just to spite them , the pension folk have no idea what it is like to be told your terminally ill, and they have no remit to allow you to get the state pension before the set date , I don't want handouts ,just what I have paid into for all my working life in the hope that I would get my pension ,seems it's my fault not theirs that due to my carelessness I got stuck with MND and nothing is going to make them change the rules, I was going to say it's unfair , but that's life innit.

Regards
Pete

[Laila]

I am cashing in my pensions. These are workplace pensions that I have contributed to over my working life not state pensions. Pensions are a sellable item that can be traded. After taking financial advice the aim is to sell the pensions to the highest bidder, to the company that makes the best offer of lump sum and monthly payments. Some questions were asked about medical condition and for doctors reports, I didn't have to get a life expectancy report. Here you can trade off one company against the other. Course one will offer the minimum, another a bit more, so play them off against each other to get the best deal. Carol

[john]

Hi Pete,
The welfare state relies on winners and losers to work and as life expectancy goes up the odds become all wrong. Unfortunately there isn't a crock of money with your name on it. What you paid in was used to pay pensioners then and the next generation has the pleasure of paying your pension. This is why pension ages are being jacked up so we can afford to keep giving the civil servants, police, doctors and politicians their pensions from ages most of us can only dream of. They will tell you they have paid for their pensions but the figures tell a different tale. Unfortunately the only people who could change this ridiculous situation are the politicians who are beneficiaries of the same largesse. Like their up and coming pay rise that we don't talk about anymore - we are all in it together just that some of us are more in it than others.
John

[john]

Hi Carol,
You should be offered enhanced benefits because of your illness and this certainly wants stressing when seeking quotes. Pension payouts are based on annuity rates which are based on life expectancy rules. I don't want to upset you but your life expectancy is somewhat less than the norm and consequently your pension benefits should be enhanced to reflect that.

John

[Laila]

Hi John,

Thanks Im sorted with my pensions with my financial advisor. Im aware of my life expectancy. carol

[MrsJBishop]

John I was a little put out by your comment about money being given to police. I am 43 years old with a 4 year old and a 6 month old and have had to retire early due to me contracting MND. In my 19 years service I contributed 11% of my salary each month, which was more than that tax I paid. I transferred my previous employs pension into my police pension. Because of this I am getting and extra 18 months pension. I retire with a reduced pension because I have not done my 30 years and I believe I have contributed and earned every penny.

Hi Pete,
The welfare state relies on winners and losers to work and as life expectancy goes up the odds become all wrong. Unfortunately there isn't a crock of money with your name on it. What you paid in was used to pay pensioners then and the next generation has the pleasure of paying your pension. This is why pension ages are being jacked up so we can afford to keep giving the civil servants, police, doctors and politicians their pensions from ages most of us can only dream of. They will tell you they have paid for their pensions but the figures tell a different tale. Unfortunately the only people who could change this ridiculous situation are the politicians who are beneficiaries of the same largesse. Like their up and coming pay rise that we don't talk about anymore - we are all in it together just that some of us are more in it than others.
John

[Terry]

Hi J;

Welcome to the forum, but it is a shame that your first post has a little dig at probably our most knowledgeable at hard working member. Like you, I had to compulsorily pay vast amounts of money into a pension, by far a bigger percentage than any others I knew at the time. If I had a choice at that time I would not have done it.

I think that the trouble in our pensions finances happened because the money at the beginning was not invested and just went into the system. It was thought wrongly that future people paying in would pay for those that are retired. This led to the shortfall.

Unfortunately it appears we both won't make the most of our pensions.

John quote was not personal and I guess that he had a similar chance of joining one of our jobs with such a great pension if he wanted to.

I think that the police do a good job and that I would not want to do it.

All the best, Terry

[pete]

Hello Mrsjbishop,

Sorry to hear you have been diagnosed with MND ,at a relatively young age, John replied to my post regarding the pension situation at the time I found out my life wasn't going to turn out as I wanted it too, for me I had worked in security for 24 years and like you paid into a company pension scheme ,the big difference is my pension is laughable and doubt if I will live to reach the magic age of 65 ,because there is no way of getting my state pension early because I had the misfortune to get MND ,so like you ,I too believe I deserve my pension as I have worked all my life ,never being unemployed or claimed any benefits until now , so yes it's unfair , but no one ever said life was fair .

[fishmate12]

Hi Pete,

See your GP, he can verify to State Pension that you're unlikely to reach Pension age ££££££££££££££££££