pension at 55?

[Deleted User]

I have 2 pension funds that i dont make cont.to one worth around £3k the other £20k,i havent been able to work for 15 years and have a number of health issues
Q. would i be able to take the tax free 25% when i`m 55 next feb but not the pension(in other words leave 75% to continue accruing?)

Perelandra

Sorry to hear about your health issues,

Yes, although you won't be able to take any further 25% from that pension in the future, if the remaining 75% grows.

Also, please be mindful that there may be tax implications on the pension if you were to pass away. If you die before reaching 75, the whole of the pension pot can be inherited tax-free. However, if you take the 25% lump sum, the remaining balance would suffer 55% tax. Depending on your circumstances, this may or may not be relevant, but it's worth mentioning.

jamesd

The 55% tax charge is no charged if the money is inherited into a pension pot fora spouse, just if it is paid to anyone, spouse or not, outside a pension pot.

for reasonably modern personal pensions you can take 25% but not all providers will allow it. The solution for those is to transfer to one which does. Those that don't provide it may do things like say you must buy an annuity with the remaining 75% at the time you take the 25%. Don't believe them.

However, it is worth knowing more about these pensions because it appears that the last one was taken out might be fifteen or more years old and might not be a standard personal pension or might have additional benefits like a guaranteed annuity rate if an annuity is purchased at certain ages.

atush

Also, do consider the effect of taking your pension early on any benefits you are receiving. If you take your pension now at 55, any means tested income you receive could be reduced therefore negating the pension.

In your case, I w ould not take it until later. Consult CAB or other charity for advice before any action.