Withdraw Pension Early

Spidey_warhol

I am 31 and I am wondering if i could withdraw my investment pension to use in my H2B ISA. I have read about the 55% income tax fees, but if i put it into my ISA wouldn’t i get 25% back? I have a much better paying job than i used to and would rather put investment in property than the stock market. 

Many thanks 

GunJack

in a word, no, you're too young (55 rising to 57 potentially)

EdSwippet

Early pension release rules - Pensionbee

There are some instances where you can release your pension before 55, but you’ll need to meet certain conditions. ...

If none of these circumstances apply, HMRC may view your early pension release as unauthorised, and you’ll be charged up to 55% tax on the amount you withdraw. Because of this it’s highly unlikely that a reputable pension provider will help you release your pension early, which means a third party will need to do it for you. They could charge you up to 30% to do so, leaving you with just 15% of your pension overall. Usually the firms that arrange early pension release for under 55s aren’t authorised by the Financial Conduct Authority, which means you’ll have no protection if anything goes wrong.

There are numerous pension scams that claim they can help you access your pension before 55 by exploiting loopholes in the system. Unless you meet some of the criteria mentioned above, or have been explicitly informed by your pension provider that you qualify for early pension release, you shouldn’t trust a third party to act on your behalf.

MEM62

Spidey_warhol said:

and would rather put investment in property than the stock market.  

And how is that going to feed you and pay your bills in retirement?  

There is no better financial instrument to provide for retirement than a pension.   

Malthusian

Spidey_warhol said:

I am 31 and I am wondering if i could withdraw my investment pension to use in my H2B ISA. I have read about the 55% income tax fees, but if i put it into my ISA wouldn’t i get 25% back? I have a much better paying job than i used to and would rather put investment in property than the stock market. 

There is no 55% tax for taking money out of a pension before 55. This is a myth.
Withdrawing money from a pension before the minimum access age (55 rising to 57) is illegal and no legitimate pension scheme will allow you to do it. 
If a scheme paid a withdrawal before the minimum age, there would be a 55% unauthorised payment charge, a 15% scheme sanction charge, and potentially a 40% deregistration charge on all the scheme's assets - on you and everyone else who held a pension with them. This is where the "55% tax if you withdraw before 55" myth comes from. It is also why the only schemes that will break the rules are "pension liberation" scams.
The usual outcome of handing your pension to a pension liberation scam is that you lose all or nearly all of the pension and often have to pay a tax bill to HMRC on top.

Spidey_warhol

there is so much misinformation about this. Thank you for the guidance. 

Spidey_warhol

@Malthusian do you have any links to where this is stated as illegal? 

coyrls

https://www.gov.uk/guidance/pension-schemes-and-unauthorised-payments

Malthusian

Also see PTM134000 and PTM033100 in particular.
Ignore Dr Google's wittering about how "it isn't illegal but..."

Spidey_warhol

Brilliant, thanks everyone!

LHW99

And you don't get 25% back on money that goes into an ISA. It just is tax free on any growth while it is in therre, and tax free when it comes out. If you have spare cash and put it in an ISA you can get that out at any age - but like everything, once its gone its gone.