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Private Pension Pot

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albaqwerty | 14:11 Wed 16th May 2018 | Personal Finance
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I'm sure I heard/read somewhere that when you turn 55, you can access money in your pension.

Is this correct? If so, does anyone have any advice please?

Many thanks.

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yeah - dont
if you wish to retire at 55 then 'vest' it ( claim it)

otherwise leave it as a pension pot
Question Author
thanks PP, I was tempted to access some for transport :-)
I don't know if rules have changed in the last 10 years but you may be taxed on it if you do. My wife had a pension with her job; she was made redundant and got a temping job, so she started buying a private pension for when she retired. At retirement time we looked what it would buy as income and decided, since it was only about £50 per month, she might as well cash it in. You get tax-relief on any money you pay into a pension; when you start to receive income from it you pay tax on that. Drawing the whole lot out at once put her into the 40% tax bracket that year, so it cost a fortune.
Question Author
ouch, bhg.
With any luck, I should be well below any tax threshold, but will wait and see.
I worked for Diligenta which is part of Friends life now Aviva, we had loads of people do this when it came in, our advice was always speak to a financial adviser as every one is different.

we told people to look here.
Money advice service(government website.
or here.
https://www.unbiased.co.uk/financial-adviser-enquiry?gclid=EAIaIQobChMIv7iVs7mK2wIVypkbCh3B7AU7EAAYBCAAEgJHLvD_BwE


Heres a bit of information.

https://www.direct.aviva.co.uk/myfuture/PensionWithdrawalTaxCalculator
Question Author
many thanks for the links, will have a look at them later this afternoon.
Much appreciated.
Bear in mind you might live another 45 years.
First, talk to PensionWise - a government-managed advice service.

Second, yes, in theory, you can take 25% of your lump sum pension pot as a tax-free bonus. However, you'll ten have to invest the remainder in some specific pension vehicle. That could be draw-down (taking sums regularly from the capital), or an annuity (likely to be terrible value at p-resent), or simply leave it in a specific pension-focussed investment vehicle.

Bear in mind that the State pension will become increasingly under pressure, and whatever you have left after you take your 25% will have to deliver your income for the rest of your life.

I am facing similar decisions. My decision is to leave the full pot intact, while I continue to work. My pay brings in enough to pay the bills and so on. WHile I could get my hands on a substantial sum by cashing in the 25% tax-free, I' not going to do that, partly because I don't know what my circumstances will be in a few years' time when I reach State retirement age, and partly because all the rules might change in that time frame.

Pensions are a very complicated business and a minefield
If your'e intending on drawing money out ; i would suggest you get some expert advice as to the pros and cons
I got my civil service pension at the age of 40 so I can't moan about that. I got 31/80ths.

I paid into AVCs with Scottish Widows and get the grand total of £50 (less £10 tax) each year. I was a little disappointed with this amount. :-)

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