The option to cash in on your pension early is certainly not one that should be taken lightly! While accessing a tax-free cash lump sum before the age of 55 will seem like an exciting offer that shouldn’t be turned down, people opting for a savings release should consider how their pension will be affected in the long run.
The aftermath of an early pension release isn’t something everyone can handle, but this essential guide reveals how it will affect your retirement income so you can make the right decision for your circumstances. There are certain questions you should ask if you are looking to access your pension savings before retirement, so answer each of these realistically before you opt-in.
How much will be left in my retirement pot if I sell my pension? This is perhaps the most important question that should be answered before you choose to release funds from your retirement nest egg. Using a transfer scheme you can access up to 25% of your pension income early, but this will leave you with up to a quarter less after retirement, which could mean a significant dent in your monthly pension payments. Ask for a breakdown of how much your pension income will be after a release and weigh up whether you could survive on a lesser amount.
You must also question whether the amount of money you pay to a financial advisor and settling charges that come with early releases is worth unlocking funds for. Many are prepared to pay one-off or ongoing fees for the chance to get their hands on cash now, but be clear on how much this will cost.
The aftermath of an early pension release isn’t something everyone can handle, but this essential guide reveals how it will affect your retirement income so you can make the right decision for your circumstances. There are certain questions you should ask if you are looking to access your pension savings before retirement, so answer each of these realistically before you opt-in.
How much will be left in my retirement pot if I sell my pension? This is perhaps the most important question that should be answered before you choose to release funds from your retirement nest egg. Using a transfer scheme you can access up to 25% of your pension income early, but this will leave you with up to a quarter less after retirement, which could mean a significant dent in your monthly pension payments. Ask for a breakdown of how much your pension income will be after a release and weigh up whether you could survive on a lesser amount.
You must also question whether the amount of money you pay to a financial advisor and settling charges that come with early releases is worth unlocking funds for. Many are prepared to pay one-off or ongoing fees for the chance to get their hands on cash now, but be clear on how much this will cost.
