Private Pension

Williampz63

Can anyone out there tell me, if you take your pension early at 55, and it was due to mature at 60, does 5 years make a great difference to the final pension and or lump sum?

dunstonh

Williampz63 wrote: »

Can anyone out there tell me, if you take your pension early at 55, and it was due to mature at 60, does 5 years make a great difference to the final pension and or lump sum?

Yes it will. Annuity rates will be based on 5 years younger if you use the secured income option. Unsecured will also have a lower maximum.

5 years less contributions means lower value and 5 years less growth (assuming you phased the risk down in that 5 years, then growth may not be a major issue. However, it could still be 25% lower because of early commencement).

Williampz63

Thanks,

May sound like a stupid question but would it make any difference that i no longer contribute to this pension and it was frozen 5 years ago?

atush

Yes, annuity rates and growth will still be adversly affected.