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PENSION RELEASE (APPLICABLE TO OVER 55’s ONLY)
'Unlocking Your Pension' - stop and think!
You may have seen or heard adverts about getting your pension
money before you retire if you are 55 or over. They might sound
tempting - but stop and think.
A pension is a long-term savings plan for your retirement so
think very carefully before cashing in part of your pension before you
retire. Once you have used the money, there is less time to go
back and save up again. Cashing in part of your pension could seriously
harm your income and lifestyle for the rest of your life.
What is 'unlocking your pension'?
'Unlocking your pension' is marketing jargon for taking your
pension benefits before your normal retirement age. This means the money
you take will not only be less than if you had left it until
your retirement age, but it will have to last longer.
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What happens when you 'unlock your pension'?
If you have an occupational pension fund with a former employer
and you are 55 or over, you might be able to take your benefits
by taking early retirement (subject to the schemes trustees approval).
If you can't take early retirement from your occupational pension
scheme, you might be able to transfer your benefits to a new
pension arrangement before retirement age.
Please note that if you are a member of your employer's occupational pension scheme it is unlikely that you will be able to access the pension until you leave the service of your employer.
If you have a private pension either stakeholder, personal pension or AVC's, you can take your benefits from age 55 onwards. This is called 'unlocking
your pension' and means that you can:
• take a tax-free lump sum out of your fund (up to a maximum of 25%);
• take an income directly from the pension fund without the need to purchase an annuity, alternatively,
• buy an annuity with the balance of your pension fund to give you a pension income for life.
For other options please see the section on Drawdown Pension.
'Unlocking your pension' may not be to your long-term financial advantage. Only in exceptional cases, where you have immediate needs and no other options available, should you consider this option. You should take qualified independent financial advice before making any decision.
To have an independent expert get in touch with you to offer some initial advice,
simply enter your details below.
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