Pension Options
If you are looking at various options regarding your pension, you are probably a little confused. There are a number of different products in the market that state they can do various things with your pension so we thought we would cover the most popular products and/or services currently being advertised on the net.
Wealth Warning
Before entering into any contract with a supplier / provider / adviser, you must take professional, independent and unbiased advice from a professionally qualified and authorised adviser. Also, if you are looking at a scheme that purports to release money from your pension, you MUST ensure that it does not flout Inland Revenue rules on pension liberation as you may face significant tax penalties if the scheme is not set up correctly.
Please note: The following information is what we have taken from various websites in the public domain – not what we believe, advise, endorse or recommend.
Pension release
Usually, this is available to people from 55 onwards. All non-state pension schemes have the option of taking up to 25% of the pension fund as a tax free lump sum upon retirement age. However, if you are aged 55 years or over and have a sufficient amount in your pension fund it may be possible to unlock the pension fund early and access this tax free lump sum before you retire.
Pension unlocking
This appears to be another term for pension release.
Pension transfer
A pension transfer is where an individual has a pension, be it a current company pension, paid up or frozen pension or personal pension, and transfers this pension into a brand new pension product. This is usually an option if you are not happy with your existing money purchase or personal pension provider due to various factors such as poor performance or high charges. Please be aware that if you have a final salary pension and are considering this option then you may be giving up valuable benefits and once transferred, you will be unable to re-enter your final salary scheme. You should also be aware that transferring your pension into a new scheme (whatever type of scheme that may be) will usually result in a number of front end charges and those charges will come out of your pension fund.
So as you can see, a lot of different terminology is used and we appreciate that it can be confusing, that is why it pays to speak to one of our professionally qualified partners who can advise you on your options.
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We are an independent review site and information portal for all things pension related. We do not offer advice nor or we qualified to do so - we simply provide and collate information that is already in the public domain. Before making any decisions regarding your pension, you should always seek advice from an appropriately qualified adviser.
