What Is A Pension Release?

Should You Choose a Pension Release?

A pension release means taking a lump sum out of your pension fund before you reach the age of retirement. For some, unlocking your pension may be a viable way of securing cash in a difficult time or an easy way to take early retirement. There’s nothing to stop you from working afterwards, or from making additional contributions towards your pension, so if you are 55 or over then a pension release may be the right choice for you.

Understanding the Risks

Of course, there are always risks involved in any kind of withdrawal, and your pension is no exception. This is the money which has been set aside to keep you in retirement, and it may have taken you a long time to put it away. If you opt for a pension release, there is no guarantee that you will be able to replace the money. Before you decide to choose a pension release, it’s recommended that you talk to an expert pension adviser.

How Does it Work?

Pension release could involve taking either a lump sum or monthly payment from your pension, or both, as long as you are currently not already in receipt of it. How much you can take is dependent upon several factors, such as your health, age and the benefits you would like to be included in the release. Once you’ve spoken to a financial advisor you will need to find a company which specialises in pension releases. Most of them will offer free financial advice on what penalties you will incur, if any, and whether or not you will need to pay income tax on your earnings if you invest your pension money in your work. Depending on whether you have chosen a capped drawdown or a flexible drawdown pension, you may want to consider moving your pension to a new provider in order to maximise your annual income once you retire, however if you need to transfer your pension to a new provider you may incur large fees. Your financial advisor should provide you with all the necessary information to make the best choice, however make sure they are fully qualified and regulated by the FSA so you can be sure you’re being given the right kind of advice.

Which Pension Release Company Should I Choose?

Ideally, the pension release company you use should comprise a solid team of experts who have experience in negotiating pension releases for people of different backgrounds, incomes and situations. The right advisor will be able to negotiate a release that is suited to your unique needs, which will secure you the most amount of money for the least cost and risk.

For advice on pension release visit Pensionlite whose team of experts are experienced in handling, not only pension releases, but also pension transfers, drawdowns and investments. Their team of advisors will communicate with you in writing about the best way to go about choosing and securing your pension release, and if you choose to do nothing then the service is completely free.