Access to Pension Savings

Once you have reached the minimum pension age (currently age 55), you may be able to withdraw unlimited amounts from your pension savings at any time. However, there are pitfalls to avoid and advice is key to ensuring your future financial well-being is safeguarded.

The pension access rules bring both opportunities and threats: there are sometimes good reasons to tap into your retirement savings early, such as paying off a mortgage. However, it is also important to remember that you have built your pension fund to provide for a long and comfortable retirement.   Depleting the pot early may compromise your long-term financial security.

Our advisers will:

  • Identify, assess and evaluate all your pension savings, including Legacy Pensions from previous employers.
  • Help you formulate a strategy that meets your needs both now and in the future.
  • Explain the choices available and work out the most suitable route for you.
  • Ensure that you understand the tax treatment of any withdrawals you make.

Pension savings can either be withdrawn as needed direct from your savings pot – known as income drawdown – or can be used to purchase an income for life – known as an annuity.

Income drawdown gives more flexibility in terms of income stream and death benefits, but remains subject to investment risk and volatility, so has to be carefully managed to ensure that you do not run out of money during your lifetime.  Annuities lack this flexibility, but they are arguably less risky and provide certainty of income for life.  Furthermore, some pension funds benefit from a guaranteed annuity rate that is higher than anything available on the open market and some annuity providers offer enhanced rates for ill health.

A combination of annuity and drawdown can also be used.

Public sector and other defined benefit company schemes are subject to different rules and many include valuable benefits that would be lost if transferred under pension flexibility rules. Some schemes may not permit transfers out. It’s really important to get advice before accessing or transferring this type of scheme.

The value of your investment can fall as well as rise and you may get back less than you have invested.

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