Below is a collection of our most commonly asked questions and their appropriate answers.
If you are looking for the answer to a particular question but can't see the information you are looking for listed, please contact us, our friendly team of professionals are ready to help you.
Yes, Pension Release is perfectly legal, but don't get Pension Release mixed up with Pension Liberation schemes. Pension Liberation schemes often use similar language to disguise Pension Unlocking or Pension Release, which is not always legal. Legitimate schemes will only ever apply to people over the age of 55 and the most you can release is a maximum tax free lump sum of 25% of the total value of your pension fund. We recommend you are wary of any company who is offering to release your pension before age 55, as in the Pension Regulator's own words; "there is a high chance that these are scams trying to con you out of your money." You should only take advice from a company who is authorised and regulated by The Financial Conduct Authority.
If you are between the ages of 55 years and retirement and you have a qualifying pension scheme, then you could be eligible for Pension Release. You cannot release any part of a state pension, and you must not already be drawing an income from the pension.
Ultimately this is down to how much money you have saved into your pension fund, if you give us your permission we will find out for you. It will then depend on what options you choose, whether you want to take a cash lump sum, you would prefer a regular income, or you want to do bit of both. Once we have carried out our free, no obligation pension assessment we will be much better placed to give you a figure for the amount of money you can release. 25% LUMP SUM - You can usually release up to a maximum of 25% of your pension fund tax free. It is possible to draw down a one-off payment without having to continue with an ongoing regular income to release a little more of your pension early, although the extra money could incur income tax liability and would not be available to you on retirement. It is worth remembering that future rates of tax can change and that your actual tax liability will be determined by your individual circumstances at the time. This option is not possible with all pension schemes. REGULAR INCOME - The amount of income you can receive from your pension will depend on many factors, including your age, health and what death benefits you choose. You can either buy an annuity, or you can draw down an income from your pension every year. If you decide to take a regular income from your pension you are under no obligation to stay with your current pension provider, all pension plans include an Open Market Option that gives you the right to have your income paid by a different provider. There are many different pensions available and each have their own benefits and restrictions, as with anything you should always shop around to find the best deal for you.
Some companies outsource all the work to 3rd party, but we do all the everything ourselves. That way we can guarantee our high level of service We are proud to have a whole of market status, meaning we can offer products from across the entire financial marketplace. As such we are able to identify the best financial solutions for our clients and are able to deal with your case from start to finish. We also have permission from The Financial Conduct Authority (FCA) to advise on BOTH Personal and Company pension schemes; this requires additional professional qualifications and robust monitoring structures to protect you.
It is impossible to say what Pension Release would cost you without assessing your current pension situation and knowing your aims. Some pension providers charge to get your cash out early, although most of them don't. Transferring some of your pension to a new provider will almost certainly incur setting up charges. We also charge a fee for arranging the release of your pension. Our fee is deducted from the money when it is transferred. You do not have to pay us anything to find out what your options are, only if you decide to go ahead. This fee will not affect the amount you will receive. We also charge an ongoing fee, deducted from the money remaining invested, which covers annual reviews and any ongoing advice that you may require regarding this pension. We will always make sure you are told exactly what costs and charges there are before you decide what you're going to do. If you don't do anything then you don't have to pay us anything.
If you want to you can. A large part of our service can be conducted by a combination of Telephone, Royal Mail and Email. However, given the complicated nature of Pension Release we would recommend a face to face meeting, especially if your enquiry relates to an old company pension scheme. Having said this though, the choice is entirely yours.
We are not able to help with individual funds of less than £10,000 if this is the only pension you have. However, if you have a combination of pensions that in total add up to £10,000 or more, we can help.
Most pension schemes can be accessed either directly or by transferring them into one that can. C&IS specialises in ALL UK Pension Types. These could be Personal Pensions, Stakeholder Pensions, Former Protected Rights Pensions and "old style" Retirement Annuity Contracts. They could be any type of Company Pension Scheme, Executive Pensions, Section 32 Buy Out Bonds, Final Salary Pension Schemes (also known as Defined Benefit Schemes) or Money Purchase Schemes (also known as Defined Contribution Schemes). From April 2015 transfers from unfunded Public Sector Final Salary schemes will be banned. For more detail please see our 2014 Budget Update page.
This will depend on what benefits you're receiving and how much money you want to take out of your pension. It will also depend on whether you take an income now or a lump sum. The decision as to whether your benefits are affected is usually made at your local benefits agency so you'll need to check with them. However; we'll be able to advise you how most benefits are usually affected. In a lot of cases your state benefits are not affected if you simply adjust what you take out of your pension. Again, we will be able to let you know about this before you make any final decisions.
No, this is not a loan. The money is already yours, you've been saving it as you paiy into your pension scheme and as such there are no repayments to be made, you are just getting your money early.
No, and you are not allowed to sell your pension, rules are in place to protect you from this. You are simply taking money out of your pension early, the pension remains yours.
No, you are allowed to release money from your pension and continue to work if you so wish. Remember, pension release is not suitable for everyone and if you are an active member of your employer's occupational pension scheme then it is extremely unlikely that taking money from that type of pension early will be the best option for you.
You have the choice of having it paid annually, half yearly, quarterly or monthly; either in advance or arrears and either increasing each year or remaining level in payment throughout. In the event of your death you can also make provision for a pension to continue to be paid to your spouse or partner or dependents.
You can usually take up to 25% of your pension fund tax free and the remaining fund must be used to provided income at some point. Whether this is a one off payment used to increase the amount of cash you receive in your first year or, a regular ongoing income, it will be classed by HMRC as earned income and taxed at your highest rate. You should remember that future rates of tax can change and actual tax treatment will depend upon your individual circumstances at the time
From April 2015 the above is changing and if you are in the type of pension scheme that will allow you to take 100% as cash, 25% will still be tax free but the balance would be taxable at your highest rate of income tax. For more detail click here.
We'll provide you with full details about your options and explain them to you in a way you can understand.
Our Pension Release services only apply to UK based pensions. Pension Release and accessing your pension early will reduce your pension income at retirement and therefore is only suitable for a limited number of people in certain circumstances. Pension Release is not an easy option for raising money and you should always take professional advice from someone authorised and regulated by the Financial Conduct Authority. To find out if you qualify please contact us today.