I am considerering unlocking some of my pension (just enough to buy a nice small second hand car) and would like to only hear from anyone who has released some of their pension. Most of you will advise against it but as I can't normally afford to treat myself (as I have a family) I would like to enjoy some of the money while I am still young enough to. What's the point of having the money later if I am physically not able to enjoy it.
2007-03-14 05:26:26 · 4 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
As far as I'm aware most pensions won't let you do this. I wouldn't do it if i could though.
2007-03-14 05:33:51 · answer #1 · answered by pigletsam 3 · 1⤊ 0⤋
Yes.
WARNING = you can do this yourself = it's very easy and there is no reason why you should be ripped off by some 'Financial Consultant' who will be only too happy to charge you £1,000's to stuff you into his favourite (high commission paying) Unit Trust etc.
First I am over 50. If you are under 50 this is not possible.
The Company I worked for would not allow me to Retire before 55. Further they insisted I take all my Benefits at the same time. I did not want to do this because the 'Final Salary' portion of my Pension is worth more the longer I leave it.
So I transferred my Company AVC Fund into a SIPP (Self Invested Pension Plan). I used some of the money to purchase shares (you can buy Index Tracker funds or shares in individual Companies such as Tesco etc) but kept a good portion in cash.
I then informed the Plan Managers that I wished to 'Retire' and claim the 25% Tax Free Lump Sum. I had enough cash in the SIPP to allow this to happen (if there is not enough cash some shares will have to be sold).
I decided not to take an Annuity with the remaining fund - instead it is still invested (I control buying & selling of shares, funds etc.). I can take out a maximium of approx 5% of the Fund value per year as a Pension (which would be taxed) however (so far) I have not needed to do so (note the pension payments are per year - if you decide not to take anything out one year you can not 'carry it forward' & take out extra next year)
I hope the links below help.
2007-03-14 23:12:34 · answer #2 · answered by Steve B 7 · 0⤊ 0⤋
The way pensions are going these days, you're going to need all the money you can get when you're old. Totally DON'T!! You will only have that amount of money to live on per month and if you spend it now to 'treat yourself' you won't be able to feed yourself or have the heating on when you need it in years to come. Stickk with the pension and leave it well alone!!
2007-03-14 05:36:58 · answer #3 · answered by eat my try 2 · 0⤊ 1⤋
you've done your bit, go for your bit!
unless you think you don't deserve it?
2007-03-14 05:35:05 · answer #4 · answered by Anonymous · 1⤊ 0⤋