Pensions - seeking advice
Discussion
I'm currently 55 years old and considering activating my Pension Protection Fund (PPF) pension, which is a final salary defined benefit scheme. This scheme offers a 25% lump sum payment and subsequent monthly income.
I understand that activating this pension early (at 55 instead of 65) will result in a slight reduction in the overall value of the scheme. However, I am interested in accessing the lump sum and monthly income to help reduce my current debt.
My current workplace pension allows me to contribute £15,600 tax-free per year, but I am considering increasing this contribution to £30,000 if I activate my PPF pension. (clearing dedt and additional income would allow this) I plan to continue working until age 60.
I have read there is a £10,000 annual pension contribution limit if you have activated a "pension scheme." However, I am unsure if this limit applies to schemes held by the PPF, and specifically to defined benefit schemes.
Could you please provide clarification on the following:
- Does the £10,000 annual pension contribution limit apply to PPF-held defined benefit schemes?
- If so, how would this limit affect my ability to increase my workplace pension contributions to £40,000 after activating my PPF pension?
Any advice you can offer on this matter would be greatly appreciated.
I understand that activating this pension early (at 55 instead of 65) will result in a slight reduction in the overall value of the scheme. However, I am interested in accessing the lump sum and monthly income to help reduce my current debt.
My current workplace pension allows me to contribute £15,600 tax-free per year, but I am considering increasing this contribution to £30,000 if I activate my PPF pension. (clearing dedt and additional income would allow this) I plan to continue working until age 60.
I have read there is a £10,000 annual pension contribution limit if you have activated a "pension scheme." However, I am unsure if this limit applies to schemes held by the PPF, and specifically to defined benefit schemes.
Could you please provide clarification on the following:
- Does the £10,000 annual pension contribution limit apply to PPF-held defined benefit schemes?
- If so, how would this limit affect my ability to increase my workplace pension contributions to £40,000 after activating my PPF pension?
Any advice you can offer on this matter would be greatly appreciated.
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