I Have Been Made Redundant — Should I Take My Pension?

If you are aged 55 or over and your pension arrangement is a defined contribution plan, you are usually allowed to take your pension even if you’re planning on finding a new job.

Note that if you’re under 55, you can’t access your pension at all, not even if an ’emergency’ such as being made redundant. In fact, unless you’re severely / terminally ill with a compromised life expectancy, there’s no way to access any of your pensions before the age of 55.

Even if you are over 55, think very carefully before doing this, as taking your pension benefits early will reduce the retirement income you have available when you retire. It could also land you with an unexpected tax bill if you take out a large lump sum.

You may want to leave your pension in the scheme and take your benefits when you retire. Alternatively, when you get a new job, you might want to consider transferring your pension into your new employer’s scheme if you are allowed to do so. However, there may be charges involved if you do this.

Before deciding what to do with your pension, it’s a good idea to seek pension advice to help you decide the best option to suit your individual circumstances.