Pension Fund Release

Flatfriend

Hello

I am a new member suddenly finding herself in financial straits! Have just split up with my partner after 25 years and need to pay off some debts so that I am hopefully in a postition to take over the mortage on our jointly owned house plus buy him out. The only way I can think of doing it is to raid my pension fund for some cash but all the info seems to be available from companies that offer to do it for you and presumably charge a fee.

I qualify on the age criterior but it is not a big pension but I just wondered how I would go about finding out how much might be available to me.

I would also welcome views on wheter this is a good idea!

Many thanks

EclipsedMind

One of teh regulars will be along shortly to tell you what a bad idea it is. In summary anything that gets you access to your pension before 55 is at best only quasi legal (and could be ruled against any day with you potentially having to repay monies) and will rip you off using exhorbitant charges.

If you have real debt issues I would suggest posting a SOA on teh debt free board as the folks there are pretty nice and will help you.


EM

CannySaver_2

How old are you?

How much is in the pension?

Sorry to ask such blunt questions of a stranger!

The Canny Saver

gadgetmind

Flatfriend wrote: »

The only way I can think of doing it is to raid my pension fund for some cash

Fortunately, you can't do this until you are 55 and even then can only take 25%.

all the info seems to be available from companies that offer to do it for you and presumably charge a fee.

Said fee is most of your pension.

Flatfriend

I do qualify on age (sadly!)

I too have always thought it a bad idea - but needs must! I do have some other resources - largely some land worth about 40K which I will probably sell when I reach retirement age and I am still contributing to another small stakeholder pension which will yield a couple of thousand on retirement. I may also inherit some money in due course. I have no dependants but do need to stay in this house!

The pension itself is quasi civil service - a privatised part of a government organisation - hence on my statement it doesn't say the level of the fund just the amount payable on retirement (at 60) - £5,216. You can take a lump sum on retirment but it doesn't tell you this!

At the moment my income and outgoings are just about equal - so I need to boost my earnings or reduce my outgoings and credit card debts built up in the slow decline of the relationship are a bit of an issue!

Any advice gratefully received.

CannySaver_2

It sounds as though it is possible, but.....

It sounds as though it's an occupational scheme, and quite possibly final salary, which means it will have certain guarantees attached to it. Taking benefits early could reduce or negate these guarantees.

By all means take guidance and opinion on here but only take advice from an IFA.

Take a look at www.unbiased.co.uk go see a couple of IFAs and have a chat to them. They won't bite or charge for an initial meeting.

The Canny Saver

jem16

Flatfriend wrote: »

I do qualify on age (sadly!)

Are you over 55 or 60?

If over 55 but less than 60, pay heed to CannySaver as with a final salary scheme you can lose 4%/5%pa by taking it early.

Flatfriend

Thank you for the replies - it is a final salary scheme and I am 55. I think you are both right - I probably need to see an IFA. To be honest I just want to rid myself of the debt issues, have the security of my house and start again! Difficult but there it is!

CannySaver_2

Flatfriend wrote: »

Thank you for the replies - it is a final salary scheme and I am 55. I think you are both right - I probably need to see an IFA. To be honest I just want to rid myself of the debt issues, have the security of my house and start again! Difficult but there it is!

Perhaps also see a debt specialist someone like the Consumer Credit Counscelling Service, I've heard good things about them, not a recommendation though!

gadgetmind

Flatfriend wrote: »

I am still contributing to another small stakeholder pension which will yield a couple of thousand on retirement.

A couple of thousand PA? If so, that's a pot of perhaps £40k, and you could take 25% of this and your £2k pa at any point. I'm pretty sure you could then continue to contribute to another pension.

If by "yield" you mean the 25% lump sum will be £2k, then again you can take this now and kick off another stakeholder.

CannySaver_2

gadgetmind wrote: »

A couple of thousand PA? If so, that's a pot of perhaps £40k, and you could take 25% of this and your £2k pa at any point. I'm pretty sure you could then continue to contribute to another pension.

If by "yield" you mean the 25% lump sum will be £2k, then again you can take this now and kick off another stakeholder.

However, taking it now would have significant downsides as it is an occupational pension scheme.

Despite this, you are technically right, she could take benefits and start and stakeholder, or indeed any other form of pension. I just don't think it's right for the OP based on the information provided so far.

The OP is better off trying to sort her debt problem out with more traditional methods, far better to talk to experts like CCCS rather than using your pension, which is there for retirement.

The Canny Saver