It may come as a surprise to you that in the present UK financial climate that a great number of people in the 50+ bracket who find themselves in financial difficulties may be able to use their pension funds now to ease the strain, rather than waiting till later life to utilise their pension benefits.
You are able to withdraw the Tax Free Cash and leave the remaining fund invested to produce your pension income until your planned retirement Yes, it's true, by using Pension Release you can access some of your pension benefits now in date. Pension Release is a method of taking some or all of the Tax Free Cash from your pension (usually 25% of the fund value) and leaving the remaining fund invested until you chose to retire or take income from your pension. From 2010 you will have to be 55 to take Pension Release.
The rules on taking and accruing pension benefits are more flexible than they used to be. For example it is now possible to withdraw your benefits from an exiting fund as early as age 50. If you do this you can carry on working and start up a new pension fund to pay you further Tax Free Cash and income at a later date.
The new contributions qualify for tax relief and may be paid by way of lump sums or regular installments. From this new fund you will be able to obtain additional tax free cash and income. You must ensure that you discuss this with a qualified Independent Financial Advisor before taking any action.
Pension Release is a great option for many but you must not lose sight of the fact that. You are essentially taking income today in exchange for forgoing income in the future. You must be fully aware of any hidden costs, and the financial implications of this action in terms of losses as well as the immediate gains.
There are a number of Independent Pension Advisers who are willing to provide free Specialist Pensions Advice. They will be able to evaluate your current pensions position and give you advice as to your potential options.
The initial investigation of your entitlements should not involve a cost and you should establish this before you proceed. Your current arrangement may have the facility to offer Pension Release, but it may be that you have to transfer the funds elsewhere to achieve this. This is likely to involve extra costs and you need to be aware of these before you confirm the transfer. You should be able to request that a gross deduction of the Tax Free Cash is made and any costs and charges are levied on the remainder.