Pension - can i cash out?

Cassiachoo

I have worked for my first company where I've been paying into a pension for nearly 5 years .. I am about to leave and would like to cash out the money money I have put in (obviously not the amount the business have also put in)

Would this be possible?

Thanks

Also, i read somewhere that this recently changed and you can now do this, don't know how true it is though

d70cw6

no.

/10 chairs

PensionTech

Short answer: no.

Long answer: no, unless you're over 55 which I doubt given that this is your first company, but even if you could it would be a silly idea, you would lose all the employer money, that's free cash that you'd be throwing away, plus the tax efficiency of pension saving, and although you might want it for something in the short term, pensions are for your retirement and you must consider how you are going to get by in your old age if you start plundering your pension pots while you're still working. The question that you should be asking is "how can I rearrange my finances so that I am able to save enough into my pension to ensure that I don't fall into poverty in retirement?".

Sorry for the lecture but it's more important than you might realise. A pension isn't something you should start worrying about when you're old or even middle-aged - by then it's too late and you will find loads of people who come on here saying "I'm 50 and don't really have any pension savings and am panicking, what can I do?" and the answer is "not enough, at this point". Our generation (I suspect I am only a couple of years older than you) is heading for a massive pensions crisis, and it's on us to prepare for it.

EDIT: The bit about it "recently changing" is a reference to the pension freedoms introduced in April 2015. This allows people aged over 55 to withdraw their pension savings in more ways than they previously could; most people were previously limited to an annuity or capped drawdown, but now unrestricted drawdown and cash lump sums are available to all, although due to uncertainty and tax implications they are still not a great idea for many people. However, that still only applies to people aged over 55 (or whatever the normal minimum pension age is at any given time; for you and me, that will probably be 58 at least), so again it doesn't apply to you.

Linton

Unless you are a professional footballer or have a similar limited working life occupation, you are only able to withdraw money from a pension once you are 55 or if you are near to death. So no, you almost certainly cant cash out the money you have paid in. What you can probably do is to transfer the pension, including your employer's payments, into your next employer's pension scheme or a private pension.

ex-pat_scot

An alternative view.


GREAT NEWS! You get to keep the employer contributions.


ALSO GREAT NEWS! It will grow for many years and provide the start of your retirement planning.


(Not quite so great news) - you can't get at it yet, unless you are 55 (or possibly slightly older). In my book, that's generally a Good Thing. Pension saving needs discipline, fortitude and perseverance. Hard enough as it is, but if you had the option of early access to the cash then I dread to think of the temptation...

xylophone

Is it a Defined Benefit Pension?