Taking cash from your pension early- Things to consider

After saving for your pension throughout your working life you deserve the opportunity to take a large cash tax free lump sum from your pension pot when you reach age 55. Many people use the cash for credit card debts, loans, mortgages, weddings, home improvement, holidays, new property or new car. Once you take the full 25% tax free cash sum make sure you find a secure home for the remaining 75%. Whether it is invested for a later day or buys an annuity do your homework. A few things to check. Make sure any advice you get comes from a FCA regulated financial advisor Check the pension provider paying the annuity or investing the remaining 75% is registered with the FCA, Do your homework on the investment fund, the value of flexi access drawdown funds can go up and down. Make sure you understand the risk profile of your investment. Review the charges on the fund Make sure you shop around for the best annuity rates for your preferred annuity  Check with your fi...

If only I knew then what I know now. Before I worked in the financial services industry I took out a pension so I could make additional  contributions linked to my company pension. My company insisted I conduct this arrangement through the preferred company financial advisor which I did. We discussed my needs and concluded the following requirements- Portability as I intended to change jobs throughout my career, therefore no high transfer fees Low charges as I understood the negative impact of high charges on fund performance Medium risk funds as I had over 25 years to retirement and wanted steady growth. The only documentation I received was a copy of the fact find that reflected our conversation on needs analysis. The scheme commenced by salary deduction a couple of weeks later. Big mistake no 1 - I did not chase up a copy of the policy schedule so therefore did not check the following key things- Administration fee Annual management charge Fund sel...

Taking your pension early? Your options explained. In my last post I highlighted some really important things to consider before taking cash from your pension early. Hopefully you have considered how you will fund your retirement for up to 30 years and understand the tax implications of taking cash early.You are now  ready to consider the best way to take cash from your pension. 1. Take The Full 25% Tax Free Cash Sum In One Go. You can take up to 25% of your pension pot as a tax free lump sum. If you take all the 25% tax free sum in one go you cannot leave the remaining 75% untouched. There are three options  you must choose from including:-  Buy a guaranteed income or annuity Invest in an adjustable income or flexi access drawdown Withdraw the full pension pot as cash 2. Take The 25% Tax Free Sum in chunks. You can take smaller cash sums from your pension pot with...

55 years or older and thinking about releasing cash from your pension ? Important things to consider. The government changed the pension rules in April 2015 giving everyone over 55 years old greater pension freedom and options to release cash from their pension pots. You can take 25% of your pension as a tax free lump sum, if you take the remaining 75% it will be taxed at your highest rate as it will be added to the rest of your income. This is great news and a very attractive proposition to release cash in the short term, but it is important to make sure you can fund your retirement longer term. It is estimated that there are approximately 8 million people in the UK between the age of 55-64 and over 1 million pension pots have been accessed since pension freedom. If you are one of the 8 million considering cashing your UK pension early you may want to think about the points below:- The life expectancy of a man aged 55 in the UK is just under 82 years old...