Private pensions at age 55. To remain or to leave?

anotherdollar55

I paid into 2 private pensions in previous jobs. As I fast approach age 55, I am wondering whether to cash them in. One is with Scottish Widows which I have noticed has grown a bit recently and certainly over the last 5 years, its value has increased well above inflation / CPI rates. I know on average most pensions suffered a bit last year, but the overall trend since 2011 has been pretty good in terms of growth.

My question is, I am considering drawing out cash / taking them all as cash, but should I at this moment? I am of the mind to leave them for now and see what happens. Any thoughts on this please anyone?

Thank you.

Dazed_and_confused

I think having to pay 46% tax on them would put me off to be honest.

But each to their own.

Thrugelmir

Have you planned your retirement finances fully? Once withdrawn and spent there's no going back.

anotherdollar55

I'm just working that out now, hence posting this. I'm most likely to leave them be for the time being.Thanks.

Brynsam

If you did cash them in, where would you invest them to get a better return (bearing in mind the tax breaks you get with a pension scheme). Don't forget that if you 'flexibly' access your benefits as you are considering, you will limit yourself to £4,000 a year for any future contributions to a defined contribution scheme, whether the contributions are your own or from an employer.

dunstonh

Will your older self appreciate you robbing them of money to spend now?

I assume you intend to spend the money now as there is no other reason why you would take the money out of the pension.

The reduction in annual contribution to just £4000 in your 50s could cripple your retirement planning. Although you have given very little to go on in your post for anyone to really answer.

atush

When are you actually retiring? What will you do with t he money if you draw it out? how much do you earn? Are you still paying into a pension?

You can take 25% tax free w/o a problem. Take a penny more, and your further contributions will be cut to 4K per year (from 40K) and every penny over the tfls drawn will be added to this years income and will be taxed at your highest rate. So you will pay basic rate tax on all the pension (therefore losing/wasting it) or even HRT or above.

A shocking waste of a pension IMHO.

anotherdollar55

Don't worry folks. I was thinking aloud in a brief moment of crisis. All is calm and bright and clear too. I'm leaving things were they belong. Thankyou all.

Mnd

Is the right answer!

ams25

Well done team - another patient saved! :beer:

And well done OP for asking.

Makes you think...how many people rush into similar poor decisions without care, consideration or advice.

anotherdollar55

ams25, ... "Well done team - another patient saved!" Good way of putting it!

Mnd "Is the right answer!" .... It is indeed and thanks