Due to significant pension law changes brought into force in April 2015, people in the UK aged 55 or over have greater access to their pension. But clear advice in respect of pension freedoms (as distinct from pension unlocking / pension release / pension liberation) in the UK is hard to come by.
The following are some of the best resources to consider when researching accessing your pension:-
The Telegraph’s Guide to Pension Freedoms – 101 Questions Answered – “Questions are pouring in to financial advisers, insurers, fund firms, brokers and government agencies as Britain’s pension system undergoes a seismic change”; “Everyone needs some knowledge of pensions and how they are changing. The 101 questions that follow are by no means exhaustive. But in answering them as clearly as possible – cutting through the jargon and technicality beloved of pensions experts – we hope readers will be well equipped to benefit from the new, and very welcome, pension regime.”
Legal & General’s Guide to Accessing your Pension Pot – What are your Options?
“If you’re 55 or over and have a ‘defined contribution’ (also known as money purchase) pension plan, you can:
- Leave your pension pot invested
- Buy a guaranteed income for life
- Take a flexible income from your pension pot
- Take a cash lump sum from your pension pot
- Combine one or more of the options above. You can take cash and/or income at different times to suit your needs.”
Money Advice Service’s Guide to Pension Unlocking – “Pension release (also known as pension unlocking) means taking money out of your pension pot(s) before age 55. If you do this you will almost certainly have a huge tax bill to pay and you could end up losing all your money.” See also their guide to the dangers of early pension release if you are under 55 years old.
Unlock My Pension’s Pension Unlocking Advice Guide: “The reality of this rule change while exciting, also presents a number of risks. It means that it is more important than ever that you understand the distinctions that exist between legal and illegal means to access your pension early.”
Grove Pension Solutions’ Guide to Pension Freedoms: “If you have a Defined Contribution pension, sometimes called Money Purchase, then you have total freedom as to how you take your benefits. These pensions include Personal Pensions, Group Personal Pensions, Stakeholder Pensions, Section 32 Buyout Plans, Self-Invested Personal Pensions (SIPP), Retirement Annuities, some Additional Voluntary Contribution (AVC) schemes including Free Standing AVCs (FSAVC) and Occupational Money Purchase schemes.”
Pension Freedoms Advice Guide from Prosperity Financial Solutions: “In April 2015, the law changed to give people more control over how they take their pension. For example, you no longer need to purchase annuities with your pension, and can opt to take your pension from the age of 55. However, you will still need to make sensible decisions – after all, you want to live a comfortable life after you retire.”
This is Money’s Guide: “Why must I pay big fees to a financial adviser to move my pension… I know what I’m doing: Steve Webb replies” – “The requirement to take advice on giving up a guaranteed pension in exchange for a lump sum is designed to protect the majority of savers who may not have your level of knowledge and expertise when it comes to savings and investment.”
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The information which is summarised above does not constitute financial or other professional advice and is general in nature. Advice from a professional independent financial adviser on any matters of pensions or other financial advice is recommended.