How does pension release work?

What is pension release?

Pension release is when you take the benefits early from a pension that you are not currently receiving. You can release up to the maximum Tax Free cash allowed and take a monthly income or maybe invest the balance to increase your income in retirement. It is important to understand that unlocking your pension will mean that your income will probably be considerably less than you could expect if you waited until your normal retirement date and as such is only suitable for a very limited number of people and circumstances.

Once we have received all the relevant information from your pension scheme(s) we will be able to start the process of assessing your options.

Your pension consultant will gather the information needed about your personal financial circumstances. They will compare what you could receive from your schemes at your normal retirement date with what you could get if you transfer out of the scheme as by taking benefits early your retirement income could be considerably reduced.

It is important to consider if you will have enough to live on once you retire if you take cash and/or income now.

Your pension consultant will consider how all of the benefits your scheme may provide could be affected. Benefits may include what your family would receive should you die and any ill health pension provision they may offer, possibly if you take an income now, this may alter your tax position, if you are currently receiving any state benefits they may be affected.

Options explained to you

Using all information gathered, your consultant will then discuss your options with you, sending you a written report explaining our recommendation to which option we consider the most suitable to you with both the advantages and disadvantages.

This should provide you with all the information you need to make an informed decision, but if you have any further questions, then your pension consultant is always available.

If you decide to proceed?

The necessary paperwork is arranged to ensure that you receive the cash lump sum (Tax Free) and/or income with the minimum delay.

If you decide not to proceed?

You are under no obligation to proceed with Pension Release at any time. If you decide not to proceed with pension release, then there are absolutely NO Fees or costs payable.

Would You Like More Information On Pension Release?

Plan Your Retirement Ltd has the expertise to indentify the maximum benefits you could receive and advise you on your best course of action.

Is Pension Release Right For Me?

It’s a great temptation to release your money and or income from your pension, especially if you really feel that you need it. However you must bear in mind that releasing your pension means, quite naturally, that your income in retirement will probably be considerably less than if you waited until your normal retirement age.

This means that you will have less to live on when you retire, and as such pension unlocking is only suitable for a very limited number of people and circumstances.

Unlocking your Pension will rarely be to your long term financial advantage. Therefore you should look at all the other options before you consider releasing your pension. You should ask yourself if you really need to raise extra cash? If so, could you borrow money by way of a personal loan or remortgage? Do you have any savings or other assets you could use?

We will recommend the option that we consider is best for you having considered all the advantages and disadvantages. Your objectives, circumstances and the other options you could use for raising the money. Just to remind you, there is no cost or obligation to you in our recommendation as to the most suitable option and how it will affect you now and in the future.

Do I have to pay tax on the money?

The lump sum payment is tax free. However any income you receive is viewed as part of your regular income by HM Revenue and Customs, which means that you may have to pay tax on it depending on your personal circumstances. However tax rules may change in the future.

Do I Have To Pay Monthly Premiums To The Policy?

No, in fact you can’t pay any more into it.

The purpose of this is for you to look at being able to take your money now as either a lump sum, income or a combination of both.

Can I Continue To Work Whilst Taking Early Benefits?

In most cases, Yes.

You can draw on your pension once you reach 50 and continue to work. Many people continue to work even though they are drawing their State pension and are over retirement age.

HM Revenue and Customs will include any pension payments you receive as part of your income when working out how much tax you owe. This is normal and will happen whether you access your pension now or later.

How Much Does It Cost?

Once we have completed our initial investigation we will provide you with a written report outlining our recommendation and outlining our costs. We can be paid either by fee or commission either of which can be deducted from the pension fund. The exact costs and charges will be stated to you in writing before you make any decisions.

For any further questions please make an enquiry and a professional pension consultant will provide all the answers you need.