Pension Release,
Frequently Asked Questions
Questions and Answers about Pension Release
Am I eligible for Pension Release?
If you're aged 55 or over with money in a company or personal pension that you're not already receiving then you may be eligible to receive a tax free cash sum and/or income.
How much money can I release out of my pension?
This will depend on how much money you have in your pension. If you decide to proceed with Pension Release we will investigate this fully for you.
It also will depend on if you want to take a cash lump sum an income, or perhaps a combination of both.
What are the costs?
If you proceed with a Pension Release plan we will investigate your pensions thoroughly and provide you with a written report which sets out our recommendations for you.
This report will provide you with a quotation detailing all the costs that would be involved. Any pension company recommended will have setting up charges that would be deducted from your monies. Out of this they would pay our fees by way of commission. If we charge you an additional fee we will agree this with you before we carry out any chargeable work.
If you don't proceed with a Pension Release then you don't have to pay us anything.
Do I have to retire to receive a lump sum?
No, you do not.
You can take tax free cash and or income now and continue working. We would not be able to release funds from your current employer's pension if you are still eligible to make contributions.
However the purpose of making contributions to pension schemes is to provide an income in retirement and in our experience pension unlocking means that your pension will be reduced over the longer term and may mean that you do not have enough income to meet your needs when you retire.
Is Pension Release a loan?
The money in your pension is yours, so this is not a loan and there are no interest payments to make.
What are some of the disadvantages to Pension Release?
It is worth pointing out that the whole purpose of making contributions to pension schemes is to provide an income during retirement. It is therefore important to be aware that releasing your pension benefits early could reduce your income and your standard of living at retirement. This is why pension release is only suitable for a limited number of people and circumstances and shouldn't be seen as an easy way to raise cash.
What happens if I die?
If you died before any pension transfer had taken place then the rules of your current pension scheme would still be applicable.
Once a transfer has taken place then any death benefits payable will depend on the rules of the new pension set up. This may mean that they could be subject to a tax charge. Full details will be supplied at the time.
However the benefit will generally be less if you have received your pension.
If you unlock your pension and die, the remaining fund may be subject to tax at 55%. This could reduce the value to your estate/beneficiary.
Would my State Benefits be affected?
There is a chance that your state benefits could be affected if you access your pension funds early. You should contact the Jobcentre Plus and Department of Work and Pensions for full details.
Will I have to pay tax on the money?
The Pension Release lump sum payment is tax free. Any income you receive will be viewed as part of your regular income by the HM Revenue and Customs, which means that you may have to pay income tax on it depending on your personal circumstances. However tax rules may change in the future.
How can I get more information on Pension Release?
Simply complete the 'Get Started' form on the right. Alternatively call us on 01689 806717. If you qualify for a Pension Release from Your Retirement Solutions, we will send you further information along with the forms that we will need you to complete to begin the pension investigation.
Apart from the disadvantages mentioned previously, here are some other implications and disadvantages:
- Releasing Cash from your pension should not be seen as an easy option for raising cash funds
- Releasing a Cash from your pension now means that you may not be able to have a cash lump sum when you actually retire
- Taking your pension benefits now means that your pension will be reduced over the longer term and may be insufficient to meet your needs in retirement
- Taking your pension benefits now means that your standard of living is likely to be lower in retirement
Would you like more information on Pension Release?
Simply complete the Start Your Enquiry form on the right and if you qualify we will send you a FREE Information Pack. You are under no obligation to proceed and there are no costs involved if you decide not to proceed with Pension Release.
Taking any of your pension benefits early is likely to reduce your income at retirement. In our experience Pension Release is only suitable for a very limited number of people and circumstances and should not be seen as an easy option for raising cash. This is because a pension is designed to provide you with benefits when you retire.
Alternatively call now for a free no obligation Information Pack on 01689 806717 and we will be happy to help with any questions you may have.
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Testimonials
Your admin team kept me up to date with what was happening with my application and at what stage it was, as it progressed.
S.Lee Manchester
March 2008