Can I transfer my old private pensions?
Question asked by Tessa King
Is there a particular age I can take money out of my personal pension? Is it fixed at state retirement age or can I take cash anytime?
If you haven’t yet reached the age of 55, you usually won’t be able to take any money out of your pension. If you try to take money out of your pension before this age there could be a 55% tax charge.
If you are aged 55 or over and have a defined contribution pension, otherwise known as a money purchase scheme, you will be able to cash in as much of your pension as you want to. This is sometimes known as pension release.
However, you should consider the tax consequences and the effect on your retirement income if you deplete your pension fund too quickly. It is often possible to take up to 25% tax free but anything in excess of this would be taxed at your marginal rate of income tax.
Moreover, if you cash in your entire pension in one go, you won’t have anything to live on in your old age. You’ll also be subject to inheritance tax on the amount you’ve withdrawn if you die without it being inside a pension wrapper.
If you are at all unsure what to do, please contact us for pensions planning advice specific to your current situation from one of our qualified Financial Advisers.