Money Talks: I put money into a pension in my last job, can I cash it in now? 

Our reader knows that she contributed to a pension in a previous job, but is shaky on the details. She wants to know what her options are with this potential nest egg

Lots of people lose track of previous pension schemes, but help is at hand. 

In my last job, I contributed to a pension fund but I know very little about it. I do not know how much is in it or how it is performing – how do I go about finding out more information and what are my options with this money now that I have left the company? Can I draw it down – I am 45?

A recent survey I conducted shockingly revealed that less than a third of respondents keep track of previous pension schemes, so you are certainly not alone here.

Firstly, you need to request an up to date benefit statement (sometimes called a leaving service options statement). The first port of call, therefore, is to contact your old employer and ensure that they have the correct contact details for you. When you receive your up-to-date benefit statement or get online access to your account, my advice would be to seek the services of a financial advisor who will explain all your options and offer the best possible advice.

But without knowing the exact details of your scheme, the main options available to you are as follows:

Don't change a thing

Leave the benefits invested in the scheme until Normal Retirement Age. If the fund is performing well and your costs are low, then this is a good option. You may also be allowed to draw down the benefits as early retirement benefits from the age of 50 (Subject to the consent of the trustees). In certain circumstances (if you were in the scheme less than two years for example) you may, subject to the scheme rules, be eligible to take a refund of your own contributions (not your employer’s), which would be taxable at the rate of 20%.

Move on up

Transfer the benefits to either a new pension scheme such as an Employer’s Occupational Pension Scheme, a Personal Retirement Bond or, if eligible to a Personal Retirement Savings Account (PRSA) You ask if you are entitled to draw down the funds now at Age 45. Unfortunately, the earliest you can draw down the funds is at Age 50, (unless you would be claiming due to ill health). In the event that you transfer your fund to a Personal Retirement Bond (also known as a Buy Out Bond), you would also be eligible to draw down benefits from the age of 50 without having to retire from your current employment. A transfer to a Personal Retirement Bond tends to be one of the most popular options for the following reasons.

It will transfer the full ownership of the old scheme from your old employer to you personally so you will then personally own the policy moving forward and you will receive annual updates.

Take the money

You can draw down from the fund early (from age 50) regardless of whether you have retired or not. This is an extremely important benefit if you wish to maybe access capital for any reason before the Normal Retirement Age of 65. Remember though that any capital you draw down except for your tax-free cash lump sum is taxable.

The full value of the Personal Retirement Bond is payable to your estate in the event of your death. Capital Acquisition tax may apply depending on the beneficiary, but not between spouses/civil partners.

Which one of these three options is the best one for you will be determined by your financial advisor after they have taken all your circumstances into careful consideration. As previously stated, it is very important to seek professional financial advice to enable you to make the most appropriate informed decision.

• Carol Brick, Managing Director of HerMoney has over 20 years of experience in the provision of professional Financial Advice see hermoney.ie