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Downside of taking the 25% lump sum from a pension early?

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Comments

  • wjr4
    wjr4 Posts: 1,357 Forumite
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    It’ll be in your estate for inheritance tax purposes 
    I am an Independent Financial Adviser (IFA). Any posts on here are for information and discussion purposes only and should not be seen as financial advice.
  • prowla
    prowla Posts: 14,351 Forumite
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    Some pension schemes won't let you take out the 25% and keep it running; rather you have to shift them to a new scheme.
  • cloud_dog
    cloud_dog Posts: 6,438 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    Did you post something similar not so long ago, or am I misremembering?

    Many years ago we decided to use our pension to repay our interest only mortgage by taking the 25% TFLS.  And we are very comfortable with the approach and how this has worked out for us, but for us it is a case now of pretty much taking the 25% TFLS to repay the mortgage.

    The oxymoron is that now we are approaching that stage, I am really wishing I could retain my TFLS cake and eat it by utilising UFPLS for our actual ongoing pension income drawdown. 

    So, as others have said, unless you have a need to take all of the TFLS you really should reconsider if that is the best option for you.
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • RiskyScientist
    RiskyScientist Posts: 7 Forumite
    Sixth Anniversary First Post Combo Breaker
    Yes we all know that politicians keep their promises  ;)
  • JoeCrystal
    JoeCrystal Posts: 3,454 Forumite
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    RiskyScientist said:
    Yes we all know that politicians keep their promises  ;)
    Careful! We do not want to wade into the dangerous water of political debate!!!  :)

    On a more serious note, the posters should stop speculating about potential future changes and focus on what is best for them. However, sometimes the financially best choice is not necessarily the best decision mentally and vice versa
  • westv
    westv Posts: 6,613 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    JoeCrystal said:
    RiskyScientist said:
    Yes we all know that politicians keep their promises  ;)
    Careful! We do not want to wade into the dangerous water of political debate!!!  :)

    On a more serious note, the posters should stop speculating about potential future changes and focus on what is best for them. However, sometimes the financially best choice is not necessarily the best decision mentally and vice versa
    There will be plenty more speculation up until the October budget.
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