Pension question: Can I withdraw funds?

JamieH

Hi all,

I have been contributing to a pension through my workplace for just over a year now, recently I froze the account and I have been having a think about it, I was thinking about withdrawing and setting up an ISA or maybe even stopping until after the whole credit crunch fiasco was over and done with. I'm 24 so have plenty of time (I hope) to sort it out but, was wondering if there was any way I could get my money back from the pension...

I understand I will lose my employers contributions, but, I would rather have the funds back at the moment. The company it is with is Norwich Union.

I emailed our companies advisors and they say that I can't get to my funds until I am at retirement age, which seems a bit silly, if I want to have my money back - surely I should be allowed to reclaim somehow?

Any help would be greatly appreciated.

Thanks,

Jamie

CLAPTON

if your employers were also paying into the pension then it was probably unwise to withdraw from the scheme

but in any event, no you can't get any of the money back until 55.. that's what pensions are about I'm afraid and why they are tax free.

as far as waiting for the credit crunch to finish... its best to have your money being invested while the stock market is low (like now) rather than wait until its high

dunstonh

I was thinking about withdrawing and setting up an ISA or maybe even stopping until after the whole credit crunch fiasco was over and done with.

You mean you want to stop buying units when they are cheap and wait for them to go back up again before you start buying them at more expensive prices?

I'm 24 so have plenty of time (I hope) to sort it out but, was wondering if there was any way I could get my money back from the pension...

It wouldnt be much of a pension if you could draw the money before pension age. No you cant draw it.

I emailed our companies advisors and they say that I can't get to my funds until I am at retirement age, which seems a bit silly, if I want to have my money back - surely I should be allowed to reclaim somehow?

The clue is in the name of the plan. Its called pension. Its not called savings.

I understand I will lose my employers contributions, but, I would rather have the funds back at the moment. The company it is with is Norwich Union.

Even if you could get it back you wouldnt lose just the employers contributions. You would have to repay the tax relief and possibly pay more in National insurance as well as repay the benefit of getting tax free growth.

Any help would be greatly appreciated.

I know I have been a bit harsh in my wording but you really need to get back in that pension ASAP. You are mad for doing stopping and you are losing "free money" from the employer. An ISA could take 20 years to just make up that free money and would never make up the difference in lost growth.

To put it bluntly, only a fool would turn down employer contributions into a pension.

You are aged 24 so current market conditions may seem strange to you as you have not experienced a recession before. They are quite common. Its just been a bit longer than normal this time round. We had one in the 70s, 80s and 90s. Market corrections/crashes occur frequently as well. There have been 8 financial crisis since 1956. The reasons vary, the industries hit change but apart from that there are lots of similarities. You will see at least another 5 of these before you retire. You dont panic and make rash decisions each time. Indeed, there are opportunities here and those paying monthly with a long time to go can really benefit from periods like this.

JamieH

Thanks for your replies guys, I actually hadn't thought about it in the ways you have explained to me. The way I have been looking at it is the benefit of a small cash injection over a short space of time, plus the benefit of having the money that would normally be deducted from my wage while I decide what to do.

I have no clue about the stock market and all of that kind of stuff, so I hadn't even thought about that at all!!

dunstonh: Your words were quite harsh! But I appreciate your honesty, thank you You are right, it is the first time I've had to worry about a recession myself and I think I just had the wrong idea. That's it sorted then, about time I give them a call and reinstate my contributions :P

learningtosave

dunstonh wrote: »

... You dont panic and make rash decisions each time. Indeed, there are opportunities here and those paying monthly with a long time to go can really benefit from periods like this.

thanks so much! this is exactly what i was looking for. I have no choice but to leave my job at the moment (we have to move) and i was worried by debt and the possibility of clearing it off with my puny pension (having only paid into it for about a year). now i think i'll just leave it where it is and forget about quick cash. whew! close shave!!! :money: