I’ve a mate who was recently contacted about a pension he’d forgot all about ( think it was northern foods ), it turns out it was worth apx £53,000 , I don’t know the ins and out of it all but by the sound of what he’s saying he could of taken £14,000 of that without any penalties , but he’s having a lean time of things / also believes in I’ll worry
about tomorrow another day so he cashed it , and ended up getting apx £40,000 
, he was asking me but I’ve never cashed one so no idea , but as it was a pension , apx £13,000 deducted sounds a lot .
has anyone any experience of this and does it sound about right 
ta
Yeah I did it last year. The first 25 per cent is tax free and the rest is added to your yearly income therefore some is taxed at normal rate and the rest at 40 per cent. So it depends on how much your yearly income is as to how much of the amount is taxed at the higher rate.
dozy:
I’ve a mate who was recently contacted about a pension he’d forgot all about ( think it was northern foods ), it turns out it was worth apx £53,000 , I don’t know the ins and out of it all but by the sound of what he’s saying he could of taken £14,000 of that without any penalties , but he’s having a lean time of things / also believes in I’ll worry
about tomorrow another day so he cashed it , and ended up getting apx £40,000
has anyone any experience of this and does it sound about right
Just watch out that you don’t get shafted on fees and similar, but in general, small private pensions are worthless in the long-term, and you would be better paying down any mortgage or personal debt.
The only worthwhile pensions are those that allow you to live comfortably at the end of your life - substantial, defined-benefit, and index-linked.
Similar happened to me, I had been on Income Support for several years while I was my wifes carer and on turning 60 had to apply for Pension Credit, simples! Not so, this pension that I didn’t even know I had dating back to 1977 was discovered by the Pension folk and Pension Credit was refused as it took me £10 a week over the limit!. Anyway it was 24 grand and I could either take the full amount or just a percentage and have the rest as a lump sum when I was 65 so I took 9 grand. However rules change and I found that I couldn’t have a lump sum at 65, it has to be paid weekly instead. Not a problem really, it just changed our plans of a having newer vehicle. I suppose that I would never have known about the money if I hadn’t been on benefits though?
Pete.
I worked for Federal Express from November 1988 to June 1994, I had a company pension which was non contributed by me, the funds were all paid by Fed Ex, I forgot about it until a couple of years ago, remember that I left the UK 18 years ago. I emailed the pension holders and they sent me paperwork to sign, a week later they put 27,000 quid in my bank account, money for nothing … Literally.
I also once opened a pension with the Prudential company, I made 2 monthly payments and stopped because I was young and thought pensions were a waste of money. recently I checked with them and they sent me $3,000… I think I paid a total of 34 quid.
dozy:
I’ve a mate who was recently contacted about a pension he’d forgot all about ( think it was northern foods ), it turns out it was worth apx £53,000 , I don’t know the ins and out of it all but by the sound of what he’s saying he could of taken £14,000 of that without any penalties , but he’s having a lean time of things / also believes in I’ll worry
about tomorrow another day so he cashed it , and ended up getting apx £40,000
has anyone any experience of this and does it sound about right
How old is he? If he’s under 55 it actually sounds like it isn’t enough. If you’re below the early retirement threshold the tax penalty is 55% as HMRC view it as an unauthorised payment plus a typical 30% charge for the company doing it.
If he is over 55 then it sounds about right for cashing out the whole lot. You can take 25% tax free as you say but anything over that and you pay tax on it as if it were normal income. Including his normal wages adding £53k would take him well into the higher tax bracket so he’d be paying 40% income tax on a fair chunk of it. Assuming that this has all occurred after 6th April this year the sad part is that he’s quite probably going to now be finding all his wages are getting taxed at 40% from hereon in as he’s already now classed to have used his personal allowance and has already exceeded the lower tax upper threshold 6 weeks into the tax year. If they’re not he had better put some money away because HMRC will chase him for the extra.
thanks all , sounds right then , he’s 60 .