Withdrawing Your Personal Pension
The rules for withdrawing money from your personal pensions changed in April 2015. This means that you now have greater flexibility over how you can take your pension.
If you have one or more personal pensions then these are main options:
- Withdraw 25% as a tax free lump sum and buy an annuity with the rest.
- Draw out money direct from the pension fund, while leaving the rest invested. This is called income drawdown.
- If you have several small pensions of £10,000 or less, then up to three of these can be taken as a cash lump sum even if all the other 'pots' add up to more than £30,000. Again, 25% is available tax free.
From April 2015 the rules changes mean that you can access your pension savings from the age of 55 and you will no longer be required to purchase an annuity by the age of 75. There may be tax implications arising from taking your pension early and you need to be careful that you are not causing hardship in later retirement years.
You are strongly advised to take independent advice as there maybe other alternatives. By taking your pension funds early you will reduce your pension benefits in the longer term and you must fully understand the implications of your actions.
We can help you achieve your objectives quickly and simply at minimal cost. We will fully clarify the downsides as well as the upsides so you can reach a practical decision.
Get started on your Personal Pension Review now!