Cannot take pension now till aged 55

Xbigman

And if you are unemployed and take a pension you lose a lot of benefits.




X

seven-day-weekend

robbiemac wrote: »

:mad:

I have been told that the personal pension i took out in the early 90,s with a promise i could take 25% as a tax free lump sum at age 50 has now been put up to age 55 due to government policy in may last year.

Please can someone tell me if there is a way around this? I have been unemployed for nearly 2 years now and with no savings left was looking forward to treating my family..

Many Thanks
Bob

I'm not at all sure the purpose of a Retirement Pension is to 'treat your family'.:eek: It is there to provide an income in retirement.

The law has changed and now you can't touch your Pension unttil you are 55.(imho, quite right too). No way round it!

hugheskevi

I am a lot more sympathetic to the OP about the change than others (shame about references to treating family, etc, but the key point is one of political risk).

Pensions are a financial vehicle in which one can move income from one year of life to another year. That happens to make them highly suitable for retirement planning.

Personally I want to retire at a very early age. I take full responsibility for planning for this and invest accordingly across a variety of vehicles that will produce the necessary income at the necessary time.

Whilst I am happy to accept the State Pension is extremely uncertain and shouldn't be relied upon, I am much less happy about changing rules about private saving on 5 year's notice.

That isn't to say I disagree with 55 as an age - pensions are about tax avoidance in many cases, and 50 is a rather young age to allow access, and gives a lot of scope for tax avoidance which probably isn't desirable. Nonetheless, the Govt of the day set out the incentives for better or for worse, and people responded.

I do resent that the rules can be changed after I have made a committment, and there is no way of either opting-out of the change, or reversing historic decisions that were made on the basis of previous rules. Especially when some members of occupational schemes retain the right to commence benefits at 50 and there are plenty of other examples in the pension system of protection being given to funds built up under a previous regime.

dunstonh

shame about references to treating family, etc, but the key point is one of political risk

I think that first bit is what killed the sympathy.

However, you are right. The tinkering should enhance options, not restrict them.

jamesd

Sad to say but you are barred from taking it until you're 55 unless it was one with some form of protected benefits. If you've contacted the pension provider and they have told you that you can't take it until you're 55 then it's not one of those types.

Best wishes on surviving until your can boost your income with the pension and be able to provide whatever ongoing treats the extra income will allow.

If you're unfortunate enough still to be unemployed when you reach 55, do check the effect on benefits before taking anything from the pension. You might lose in benefits what you get in the pension, perhaps more in extreme cases.

kidmugsy

It would have been far more proper (Brown and propriety are strangers, alas) to raise the age from 50 to 55 only for "new" money and to refrain from retrospective legislation on money already contributed. Swine!

atush

That wasn't the worst thing he did- we used to not pay tax on dividends w/in a pension.

Ark_Welder

atush wrote: »

That wasn't the worst thing he did- we used to not pay tax on dividends w/in a pension.

Strictly speaking, pension funds used to be able to reclaim the tax paid on dividends by companies under Advance Corporation Tax.

atush

Ark_Welder wrote: »

Strictly speaking, pension funds used to be able to reclaim the tax paid on dividends by companies under Advance Corporation Tax.

strictly speaking that was highway robbery. Esp when he spent it and there is nothing to show for it.

gadgetmind

I know someone who saved HARD to be able to retire at age 50 even though this meant he had to forgo a lot of life's luxuries. Then one day he met with the company pensions adviser and discovered that, without consultation or right to appeal, they had moved it back to 55 as he'd been born two weeks too late.

I'd like to retire at 55 but HMG might eliminate tax relief with a wave of their hand, start taxing the 25% PCLS, and move the pension benefits age back to 60, or throw any number of other arbitrary sticks into my spokes.

Meanwhile, MPs pensions will retain their gold plating with diamond pavoir.