Any way to withdraw money from a pension?

michaels

I am in the posiiton to make extra mension payments but I am worried that the money is tied up for good (or until retirement at any rate). Is there any way to withdraw money (obvioulsy repaying any tax reclaimed) early should circumstances change? If not may be there are companies that let you borrow against the security of a pension fund so you could release fuinds that way?

dunstonh

You cannot access your pension before age 50 (rising to age 55 from 2010). Even then you can only get 25% of it and its once only transaction. Meaning you dont get another 25% when you are 65 regardless of what it may have grown to.

There is no way to borrow against or sell your pension to someone else.

michaels

dunstonh wrote: »

There is no way to borrow against or sell your pension to someone else.

Any reason why not - surely if the 25% can be taken as cash someone should be willing to lend against this?

dizzie

Michael - you don't mention what sums of money are involved, but I was wondering whether you could invest some of the extra cash in stocks and shares (either in an ISA wrapper or if you don't use your capital gains allowance each year, this might not matter). That way you could keep a "reserve" which is more easily accessible should you ever need to get at it...and when you are getting nearer to retirement you might decide to use some of your ISA funds to top up your pension (since you are allowed to pay in up to 100% of the value of your annual income). Either way, both of these vehicles are exposed to the stock market and have the potential for good growth.

dunstonh

Any reason why not - surely if the 25% can be taken as cash someone should be willing to lend against this?

because they money is held in trust and you dont own the pension.

Retired_I.F.A.

michaels wrote: »

Any reason why not - surely if the 25% can be taken as cash someone should be willing to lend against this?

It is illegal to have a pension plan assigned. so the only ones you will find that'll lend are the sort that'll send round the boys if you dont pay their 10% a day terms.

david78

Pay into a stocks and shares ISA instead, then you can move it into a pension later if you want too. My DIY pension "plan" has an income generating section (SIPP) and a lump sum generating section (ISA) and I can move from the ISA to the SIPP and earn tax relief as I see fit.

michaels

I had an altogether different plan - paying in to a pension reduces income for assessment of tax credit eligability so I wa wondering if in yr1 I could pay in lots, reduce my income and live of savings plus tax credits and then in year 2 get the pension money back....