Hi guys,

I had a pension set up when I was fully immersed in the Ratrace.
There is roughly around 5-7k in the pension with legal and general.
I have no intention of putting money into a pension, but would like to get my money back before I am 65 (i'm 31!)
Is there anyway to do this, as I could use the money now for property.
I came across this post on another forum which seemed interesting, is this possible and legal?

There is actually a way I have done it for a friend. The trouble is you have to be an expert in dealing in traded options.
What I did was simple, got him to transfer his pension into a SIPP then open a seperate (non SIPP) account with an options broker.
Then I took control of both ofthe accounts via the internet and just traded between the two of them making sure the SIPP account lost money and the trading account made. I didn't focus on market direction rather lost money via the bid-offer spread. I would for example buy 10 options at 45 and then sell them at 40, this resulted in a £500 loss.
Doing about 3-4 of these trades a week it didn't take long for his SIPP account to get wiped out

Thanks for your input.

Regards

I have trusted contact who can arrange this but such schemes are typically unregulated and come with the associated risks. However I would add that they wouldn't be interested for funds worth less than 50k. I suspect you'll find the same with any of these type of funds due to the costs of setting them up and intricacies involved.

Lisa

the question you pose JP, is it legal to transfer money from a Personal Pension to a Self Invested Personal Pension, thus allowing you the choice of a much broader range of assets to potentially invest in ......yes it is legal to do this and many people have been and are doing just that, including myself.

However it is fair to say that with an increased choice of assets to invest in, some of them come with an increased risk; as in your example where using traded options is indeed a high risk investment and you can end up wiping out your fund.

Whether it is possible depends on the size of your fund. There is a choice of several dozen SIPP providers, all with different charging structures but they could be summed up by saying most will have a higher charging structure than a typical PP. For this reason most SIPP providers impose minimum transfer values that they will accept, as Lisa says a common threshold is £50k.

With small funds there is little to be gained by achieving a higher return on your fund but having it wiped out by the higher charging structure of the SIPP. No SIPP provider will want to take responsibility for your fund declining in value due to their charges to run the scheme for you.

Thus with a fund as small as £5000 - £7000 I doubt you will find any SIPP provider prepared to take your fund in as a transfer. Your limited options ar 1) leave it where it is 2) pay more money in until the funds exceeds £50k and is a viable fund to transfer

to answer some other points....

I would like to get my money back before I am 65 ... once invested you are not allowed to take the money back out. It stays there until you hit 55 (currently) when you become eligible to draw on it. Even then you cannot withdraw it all as cash; you must take the majority as income. The only exception is for pensions that are so minute (as yours will probably be) that it is impractical to pay you out as income and you are allowed to take the fund as a cash lump sum; this is referred to as a Triviality Rule

I could use the money now for property. ....as you are not allowed to take the money back out it cant be used for property. Even remaining in the pension you cannot purchase resi property with it. Commerical property is allowed to be purchased using pension funds but only within a SIPP wrapper...for which you need a fund in excess of £50k, as above

Excellent advice and information Kevin thank you for that, also Lisa, cheers
It was worth a thought, I guess it's stuck. Cheers