Pension advice? How to cancel a policy and get the funds?

Question

Hi,
I have a personal pension that was set up with my last place of employment. I paid into it for over five years and it has a value of just over £10k now.
Unfortunately my circumstances have changed for the worse, I am off on sick leave due to hyperemesis and I have a little baby due in August.
This money would be extremely useful to clear some debts and make sure I'm ready for the new arrival.
I've tried contacting the financial management company that administrated the pensions with my previous employer, but they say i cannot cancel the policy and retrieve the funds. Only keep paying into it privately, or transfer it to another existing policy.

Is there really no way I can access these funds?

If there is, how on earth do i do it?

Thanks in advance

Answer 1

Sorry, but after making 2 years of contributions, about the only way you can get funds from a Pension is to Retire.

The good news is that you can Retire at 50 (currently - that's changing in 2010 to 55). I believe it is also possible to Retire early on grounds of ill health - but you have to be suffering from something terminal ..

In order to Retire before the normal Retirement age you may have to transfer the Pension Fund into a private scheme (Company schemes are not legally required to let you retire at 50).

If the Pension Fund is small enough you can get the whole lot at once - however I think 10k is over the limit. In this case you can get a maximum 25% 'Tax free lump sum' when you retire.

Links below should help explain ...

Answer 2

Take early retirement, get 25% buy annuity with the rest, like everyone else you`ve been conned, annuity is subject to tax.