Unlocking pensions

lorrainecrosse

Could somebody give me some advise on unlocking pensions. I have just found a couple of websites where you can get some of your money from your pensions if you are over 50?

dunstonh

Its not unlocking. Thats a marketing phrase to suggest its something you can do without consequence. You are actually commencing your benefits but taking zero income. This will reduce your retirement income later in life, will prevent you taking a potentially much larger 25% later in life and reduce your death benefits.

A lot of companies have been fined for "unlocking" and its frowned upon without justification.

MikeJones_2

What do you want to know?

What type (defined benefit/money purchase) and how many pensions do you have for example?

The FSA has produced a brief list of questions for people to ponder about when they are considering Pension Unlocking. Look at page 19 of the document (actually page 11 of the PDF). See:

- Just the facts about pensions (FSA) (pdf-16 pages)

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

EdInvestor

For many years you have been able to start drawing a pension at age 50 as an annuity income for life, plus 25% tax free cash. Just recently the rules were changed so that you could take the 25% tax free cash out of a pension but leave the rest invested to grow until you retire later on.This procedure is called "income drawdown" or "unsecured pension". it is also possible to draw an income from the pension fund if you want.The maximum inome allowed is higher than what you would get with an annuity.

It is quite easy to arrange this if you have a personal/stakeholder pension with a life company, or a "money purchase" occupational pension. If however you have a "final salary" company pension it is very difficult to arrange, and may be very much against your best interest anyway.



So question 1 is, what kind of pension(s) do you have?