can i cash a pension

jamesey

me and my wife have got a pension each that we started off paying £50 a month into just over 10yrs ago with a groth of 5% each year , i think we are paying £130 per month now into each pension , we also have got an mortgage endowment that has £13k in it , we are wanting to cash both pensions and cash the endowment and pay our house off , so i dont have to work stupid hours (nights) , this wouls save me £500 a month
my mortgage is a repayment type now but we have kept our endowment on.

jem16

Unless you are both over 50 (55 from April 2010) you will not be able to access the pension. When you are able you will only be able to take 25% as a lump sum with the remainder being used to buy an annuity or income drawdown.

jamesey

were both 35 and counting , arrrghhh that was my plan we owe 40k on our house and would like to pay it off quick so i can get out of the tiring shifts i do , and i only do them for the money paid here.

bendix

For the thousandth time, a pension is not a savings account that you can just dip into as and when you like. That is why yuo get tax relief on it - you can't access it until you are 55. Full stop.

As for working to pay your bills - well, welcome to the real world. It's what tens of millions of us do too.

Harry_Powell

If you're not interested in having an income above the poverty line when you're old, you should stop paying into your pension and pay the pension premiums onto the mortgage.

That way, you can stop having to work these tiringly long hours at the old age of 35. Mind you, you may have to carry on working until the ripe age of 70 because you can't afford to retire.

moonrakerz

It really worries me when I see threads like this !

With an increasingly aging population the "retirement" age is going to keep on increasing, the OP is probably looking at a state pension age of 75+, the value of that pension will be peanuts.
The ONLY way of getting anything like a decent standard of living at retirement is to pay into your own pension pot.

The OP and OH have made a very good start with their pensions, their mortgage is LOW, why do they want to pay it off ? - so they can have holidays in Thailand every year ?

I dislike a lot of the "nannying" from the State, but ensuring people can't cash in their pension pots early is something I do agree with !

kpwll

jem16 wrote: »

Unless you are both over 50 (55 from April 2010) you will not be able to access the pension. When you are able you will only be able to take 25% as a lump sum with the remainder being used to buy an annuity or income drawdown.

Could you explain what an income drawdown is please.

bendix

An income drawdown is an alternative - available effectively until 75 but possible to extend (in a changed format beyond) - to buying an annuity. Rather than buy an annuity which gives you an income for life in exchange for giving up your pension pot, you keep control of the capital sum and invest in yourself. You are then allowed to withdraw up to (i think) 120% of the amount you would have got had you taken an annuity. The maximum amount you can withdraw is every five years to take into account how much such withdrawals (and investment returns) have impacted your capital sum.

The upside is that it gives you more freedom to do what you want with your pension fund and treats you like an adult and it means the capital sum is retained so it can be bequeathed, subject to stringest tax liabilities.

The downside is that there are no guarantees. If you withdraw your allowance the market takes a hit, your pension pot obviously decreases.

bendix

moonrakerz wrote: »

It really worries me when I see threads like this !

With an increasingly aging population the "retirement" age is going to keep on increasing, the OP is probably looking at a state pension age of 75+, the value of that pension will be peanuts.
The ONLY way of getting anything like a decent standard of living at retirement is to pay into your own pension pot.

The OP and OH have made a very good start with their pensions, their mortgage is LOW, why do they want to pay it off ? - so they can have holidays in Thailand every year ?

I dislike a lot of the "nannying" from the State, but ensuring people can't cash in their pension pots early is something I do agree with !

Stick around and you'll see a lot worse. There was a woman on here a few weeks ago who wanted to withdraw her entire pension because she and her mate wanted to go on the holiday of a lifetime. God help us.

SandC

And I had to witness a woman at work all set to take voluntary redundancy and retire, until she asked for pension details and realised that the cash lump sum she took at age 50 in order to get a spanking new kitchen has meant she has no choice but to carry on working. Am glad it's rising to 55 as we have had a devil of a job trying to explain to people this last year how it would be a better idea to leave the 25% cash put ..

chequeout

bendix wrote: »

Stick around and you'll see a lot worse. There was a woman on here a few weeks ago who wanted to withdraw her entire pension because she and her mate wanted to go on the holiday of a lifetime. God help us.

And I thought my pensions knowledge was bad!!!!!

Absolutely agree with a poster on here - State nannying is a terrible thing, but in the case of pensions they have got it spot-on.