What ways are there to stop/pause a pension?

[maura]

My hubbie has a private pension, (with no employer contributions and 20% tax relief), that he wants to stop paying into for various reasons. How do you go about it and what are the penalties like? Will he still be able to get the money he has paid into it in a lump sum when he is at retirement age?

 

[StevieC]

He has two choices, he can request the company to do a premium holiday (most companies will allow you to stop premiums for up to 12 months) or if he doesnt want to contribute to the plan ever again, he can make the policy "paid up".

There shouldnt be any penalties but you'll need to double check this with the pension provider. There will most likely remain however a fund management charge that will be taken yearly.

When he reaches retirement age, he can use the proceeds of the plan towards his tax free lump sum (subject to tax free lump sum maximum revenue criteria) and the balance if any to purchase an annuity.



www.CheaperLifeAssurance.ie

 

[maura]

Thank you very much for your help Steviec, its much appreciated, thats terrible we would still be charged for fund management even if we "paid up" the pension.

 

[boaber]

thats terrible we would still be charged for fund management even if we "paid up" the pension.

well the funds still have to be managed...

There may also be a monthly policy fee (not if it's a PRSA though)