You don’t have to take your pension when you retire
It is a common misconception you have to take your pension on the day you retire. Whilst some people will, investors can usually take a pension anytime from their 55th birthday (57th from 2028).
Rules which took effect in April 2015 mean you now have more flexibility and can withdraw what you like. All of the following are possible:
Access the money before you retire, for example to pay off a mortgage.
If you take early retirement, make withdrawals until you receive your work or State Pension, then stop.
If you semi-retire and keep working part time, make withdrawals to top up your reduced earnings.
Make no withdrawals and leave the money invested to pass on to future generations tax-efficiently.
Whatever you decide, please remember a pension may need to last throughout your retirement, which could be 30 years or more. 25% of withdrawals are usually tax free (this can be taken as a lump sum if you wish) and the rest taxed as income. Once you access a pension, future contributions may be capped at £4,000 a year. Tax rules can change and the exact benefits will depend on your circumstances.
Remember that these are major decisions, not to be taken lightly and the expertise of a qualified, experienced, independent financial adviser could save you thousands of pounds.
For more information contact Ben Morris on 01745 798260 or email ben@morrisfinancial.co.uk
