UKC

Between 1972-74 I did an apprenticeship in West Germany (fish farming and management), my boss paid contributions into the state pension scheme. These totalled approx 10,000 Deutsch marks at end of 2 years.

I am now claiming it back and sending off the forms (this has taken 10 months since I applied). I have absolutely no idea what the pot may be worth today or if it will have been worth the effort.

I guess if it's a small amount they may offer a lump sum? Has anyone any idea of value - beyond me to work it out.

You might be pleasantly surprised.

DM was 2 -3 to the £, so about £5000.

4 % average growth over 46 years would be about 6 times so might be worth £30k, but don't quote me !

2% average gives about £12.5 k, still not to be sniffed at.

ooh, I shall hold off ordering my new bike - I feel an upgrade coming on!

Have you considered just waiting and taking the pension? Cashing out from pensions is more often than not  a bad idea.

What, he's buying a bike. An investment in physical health and mental well being.  

I'm guessing about £6K, we should have a sweepstake and you could give half of it to the closest guess.

I have no idea yet what is offered or the value. I just thought if it was a very small amount in the pot they may offer it as a lump sum rather than a weekly payment of £5 or something -  hoping Brexit does not effect my entitlement as well! Do not discuss......

Seeing my notary public in the morning to sign final bits of paperwork and in the post. Might be a nice Christmas present but not getting hopes too high yet.

Wait six months and the value may go up 50%

I shall give that serious consideration.

Ok, no

Taking the pension rather than cashing out might be worth two bikes or even 3. Cashing out always loses money and often huge amounts of money. Its really depressing how ignorant people are about how pensions work and make terrible financial decisions as a result.

These links wont help this specific case but are genrally good and illustrative of the traps of cashing out:

https://www.moneyadviceservice.org.uk/en/articles/pension-release-or-pensio...

https://www.moneysavingexpert.com/savings/pension-freedom/

If he was an apprentice in 1972, I'm guessing he is well over retirement age so those articles aren't relevant.  It also is German, so presumably with rather different rules to the UK anyway.

I said the links were not relevant to his case.

Taking the pension will almost certainly be worth much more in the long run. If he has desperate cash needs or is about to die soon, sure, cash out.

You can't know. It will depend  on forex transaction costs, future currency movements, whether it can be paid to a UK bank, life expectancy etc. etc. 

Looking on the bright side of life, I don't intend to die soon....

Paperwork all signed and off this morning, I expect a wait before I hear anything.

I'm in a financially stable position and living well without this money, so I look upon anything as an unexpected bonus.

For instance if I accepted £10 a week into my pension, that would be lost in a grocery shop or couple of beers or whatever.

Alternatively I may be able to end up with a lump sum of £5000 (after tax etc.) This would buy me some nice new toys to play with for years and a good holiday for us both. For me it isn't just about maximizing the long term financial gains, more suddenly finding a pot of money I never knew I had and blowing the lot on pleasure.

You are right that you can't know but I'd say the odds are strongly on the side of my case... one thing I forgot is the ability to make such changes might become much more difficult after brexit and the paperwork for dealing with anything financial in the EU a lot more hassle (I encourage poeple to think of time as money when thinking of working on methods to make savings). That is an incentive to get money out from the EU now.

In reply to Moley

You could just as easily have cashed out the same amount of money from another UK pension. Fun now and tighter finances later is part of the big temptation that faces everyone under the new pension rules. Surveys of the effect of this freedom across the UK already look really bad.

Since you have done it have a good time at least...