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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 your pension before you
retire. Once you have used the money, there is no time to go
back and save up again. Cashing in 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 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.
'Unlocking your pension' will rarely be to your long-term financial
advantage. Only in exceptional cases, where you have immediate
needs and no other option, should you even consider doing it.
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. If you have a personal or stakeholder
pension, you can take your benefits from age 55 onwards.
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. This is called 'unlocking
your pension' and means you can:
• take a tax-free lump sum out of your fund;
• buy an annuity with the rest of your pension fund to give you
a pension income for life; and
• leave any 'protected rights' invested until you reach at least
age 55.
• 'Unlocking your pension' may not be to your long-term financial
advantage. Only in exceptional cases, where you have immediate
needs and no other option, should you even consider doing it.
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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