25% of Pension taken over age of 50

stockmarket-diva

I have read several pieces of information in the newspapers about the ability now to take 25% of your pension (lump sum?) once you are over the age of 50.

My husband and I are both over 50 and would like to do this as we are fully covered for retirement in other ways and would like to use this amount to invest as we wish ie property or other investments. We could make more use of this amount now rather than later.

I cannot seem to find any information about this and wondered what kinds of pensions it relates to etc.

Any help will be gratefully received.

jem16

It relates to all personal pensions. Final salary pensions usually have different rules.

You will only be able to take this until 2010 - after that the age increases to 55.

EdInvestor

In order to access the 25% tax free cash you have to "take benefits" from the pe nsions. This can be done either by buying an annuity with the remaining 75% or by putting that money into "income drawdown", where you can leave it to grow until you need it later, or take an income from it up to 120% of the annuity rate.

Typically people use a SIPP for income drawdown though it is possible to do it through insurance companies if your funds are large enough.

There is quite a lot of info about income drawdown here:

https://www.williamburrows.co.uk

stockmarket-diva

Thank you so much. This is a final salary Civil Service pension I'm talking about so I imagine that we won't be able to do that with this one. Thanks anyway.

jem16

stockmarket-diva wrote: »

Thank you so much. This is a final salary Civil Service pension I'm talking about so I imagine that we won't be able to do that with this one. Thanks anyway.

You won't be able to take this until normal retirement age (probably 60) with it being actuarially reduced. Could be as much as 5% per annum.

stockmarket-diva

I wonder about my pension and whether I can take it all now. I left the Civil Service 22 years ago after 12 years service. I am over 50. Do you think I would be able to take the whole amount now because I know if you're approved early retirement that can happen after the age of 50.

jem16

What scheme were you part of - Classic/Classic Plus?

You can take your pension from age 50 but it will be reduced by 5.25% for each year you take it early. So if you are age 55 you would lose 26.25% of your pension.

Approved early retirement needs at least 25 years service and age 55.

This link should give you some info.
http://www.civilservice-pensions.gov.uk/scheme_information/leaving/early_retirement_and_redundancy.aspx

EdInvestor

stockmarket-diva wrote: »

I wonder about my pension and whether I can take it all now. I left the Civil Service 22 years ago after 12 years service. I am over 50. Do you think I would be able to take the whole amount now because I know if you're approved early retirement that can happen after the age of 50.

You can ask if they will grant early retirement.But you are likely to find the pension you get is much lower than if you waited until later.Nevertheless it may be worth it, as it will be paid for more years.

Andy_L

They will not grant Approved Early Retiremnt as there's no business case for paying out the extra money. It's only used to restructure departments as an alternative to redundancy.
If you go early you will take the 5.25% reduction Jem mentioned.

Retired_I.F.A.

There's nothing stopping you from taking the transfer value and benefits from that now though.