Can I release 25% of pension fund and continue to add pension contributions

TechnoGeek_2

I am 50 and want to release the 25% tax-free lump sum of my pension fund but do not want to buy an annuity at this point. Can I leave the rest of the fund where it is and continue to add pension contributions to the fund?

scottishsue

Yes you can provided you are 50 before the beginning of April. I have just done it and at the same time moved pension provider. I was going to leave balance but in fact am "washing" my pension back in. I took out a "pension" with sCottish Life who pay me monthly and I pay it back in with tax relief so dont touch it. It also allows me to take another lump sum in about 5 or 10 years I think. All new at the moment. One thing I would point out is to do it ASAP. My husband following me decided to access his and we were called by our Financial Adviser to get in and sign the papers ASAP as so many people were trying to do it before the deadline of April that the Insurance companies were being inundated and werent sure they could complete all the "payouts" before the April deadline.

dunstonh

Yes you can but you need to be careful you dont kiss goodbye to valuable guarantees that may or may not exist. For example, scottishsue mentions Scottish Life. If it was an older Scottish life plan (called Talisman range) then these had guaranteed annuity rates most of the time which can be almost double those available today. If you did the transaction to get the 25% you would lose those guarantees.

Also, you may find your existing provider or pension doesnt allow it and it needs to be transferred to a personal pension, SIPP or drawdown plan that does allow it. Whilst there is just about time to do that, you are cutting it fine.