Q. I have recently divorced from my husband who works in the NHS and is a member of the 1995 pension scheme. As part of the divorce settlement I have been awarded part of his pension so I am now also a member of the same pension scheme. He is older than me so will I be able to retire when he does?
A. No the NHS 1995 pension scheme has a normal retirement age of 60 so this is the age that you will need to attain to take the pension benefits without penalty. At present you can take the benefits earlier from the age of 55 but this would be subject to actuarial penalties. In other words the pension that you receive would be reduced to reflect the fact that you are taking it early. You did not mention how old you are but as announced in the Budget in March the minimum retirement age is proposed to be increased from 55 to 57 for most people when the state pension age rises to 67 in 2028, so you may be affected by this change. Some members of the 1995 NHS Pension scheme have a right to retire from 55 with no actuarial penalty. However this right does not go over with a sharing order.
Q. I have £6,000 in a company pension policy dating back to an old employment. Can I now cash this in under the new rules announced in the budget?
A. If you are aged over 60, the HMRC rules now permit you to draw up to 3 different small pension pots (less than £10,000) as a lump sum, but this is also subject to the rules of the scheme. Previously, this was possible with up to 2 pots of £2,000 or less, but there are many pension schemes and providers which did not alter their rules to allow such flexibility, so the answer is maybe, I’m afraid.
Q. I noticed in a previous answer in your column you referred to a Lasting Power of Attorney, and suggested most people should have one. Could you explain what they are and what benefit they provide.
A. A Lasting Power of Attorney (LPA) is a legal tool that allows you to appoint someone to make certain decisions on your behalf. The appointed person can manage your finances for you in the future if you reach a point where you are no longer able to make decisions for yourself. They can also make decisions relating to your health and welfare.
Making an LPA ensures that the person you want to make decisions for you will be able to do so. This prevents a stranger, or someone you may not trust, from having this power. It can be reassuring to know that, if you are unable to make a decision for yourself in the future, your chosen person will make these decisions for you.
Should you wish to make a Lasting Power of Attorney I recommend you contact a solicitor.
If you have a question you would like Trevor to answer, please email it to: yourmoney@rwpfg.co.uk or post it to Your Money, Rutherford Wilkinson Ltd, Northumbria House, 21-23 Brenkley Way, Blezard Business Park, Newcastle upon Tyne, NE13 6DS.
0191 217 3340
