Is a Pensions Release the right option for you ?
It may come as a surprise to you that in the present UK financial climate that a great number of people in the 50+ bracket who find themselves in financial difficulties may be able to use their pension funds now to ease the strain, rather than waiting till later life to utilise their pension benefits.
It is possible to withdraw a portion of your pension fund early in the form of Tax Free Cash. This process is known as pension release which means that a percentage of the fund (often 25% ) is taken now with the remainder withdrawn at a later date. The later date is when you retire or choose to draw an income from your pension. The rules will change in 2010 when 55 becomes the minimum age to take Pension Release.
The rules on taking and accruing pension benefits are more flexible than they used to be. For example it is now possible to withdraw your benefits from an exiting fund as early as age 50. If you do this you can carry on working and start up a new pension fund to pay you further Tax Free Cash and income at a later date.
This new fund can be funded by lump sums or regular contributions, both of which qualify for tax relief. You will need to take qualified Independent Advice before making any firm commitment.
Pension Release may seem like the ideal solution to your financial problems. You need to be fully aware that this will reduce a portion of your personal income in later life. Consequently you need to be consider any hidden costs and the potential loses and gains involved before you take such an important financial decision.
You should seek Specialist Pensions Advice and certain Independent Pension Advisers will not charge you to investigate your pension plans and inform you of your options, so shop around.
In many cases your existing pension provider will have the facility for a Pension Release. If this is not possible it will be necessary to transfer your benefits to another arrangement. This is likely to involve some costs and you need to be fully aware of these before confirming. You should push to get the Tax Free cash element deducted before any costs and charges are applied.
It is possible to withdraw a portion of your pension fund early in the form of Tax Free Cash. This process is known as pension release which means that a percentage of the fund (often 25% ) is taken now with the remainder withdrawn at a later date. The later date is when you retire or choose to draw an income from your pension. The rules will change in 2010 when 55 becomes the minimum age to take Pension Release.
The rules on taking and accruing pension benefits are more flexible than they used to be. For example it is now possible to withdraw your benefits from an exiting fund as early as age 50. If you do this you can carry on working and start up a new pension fund to pay you further Tax Free Cash and income at a later date.
This new fund can be funded by lump sums or regular contributions, both of which qualify for tax relief. You will need to take qualified Independent Advice before making any firm commitment.
Pension Release may seem like the ideal solution to your financial problems. You need to be fully aware that this will reduce a portion of your personal income in later life. Consequently you need to be consider any hidden costs and the potential loses and gains involved before you take such an important financial decision.
You should seek Specialist Pensions Advice and certain Independent Pension Advisers will not charge you to investigate your pension plans and inform you of your options, so shop around.
In many cases your existing pension provider will have the facility for a Pension Release. If this is not possible it will be necessary to transfer your benefits to another arrangement. This is likely to involve some costs and you need to be fully aware of these before confirming. You should push to get the Tax Free cash element deducted before any costs and charges are applied.
About the Author:
Thanks for reading my article, for pension drawdown, and other pension related advice go to website http://www.pensionlite.co.uk
posted by Credit Counseling at
7:29 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home