Paid-Up Pensions
When you stop paying into a personal pension plan, the money that is invested will remain invested and increase in line with investment returns until you decide to take the benefits of the plan. However, some personal pension providers may charge you for stopping contributions early and most providers will continue to levy annual administration charges. The effect of these may mean that your fund reduces to zero over time. You need to find out what the policy conditions say and this can be done either by looking at the policy document or contacting the provider.
Stakeholder schemes cannot charge you for stopping contributions. You can stop and start again as often as you want without charge. However, the annual charge will continue to be made.
- Why does my statement show a lower projected pension than last years?
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This will probably be because the previous statement included an assumption that contributions would continue until you reach retirement age. As they have now stopped, the value of these future contributions cannot be included.
- How do I know what the charges are?
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The charges should be clearly shown on the statement. You will also have been told of the charges in the key features document which you should have received before you agreed to take out the pension plan. When you took out the plan, you should have received a document known as the Cooling-off Notice which allows you 14 days to change your mind and cancel the contract from the start. In the Cooling-off Notice, all charges should also have been disclosed.
- Can I keep on paying into the plan?
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Most personal pensions and all Stakeholder pensions will allow you to stop contributions and restart them at any time.
- Can I have a refund?
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You cannot have a refund even if the amount paid in is very small.
Q & As
